Possible Bearish Signals With Estée Lauder Companies Insiders Disposing Stock

Over the past year, many The Estée Lauder Companies Inc. (NYSE:EL) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Estée Lauder Companies

The Last 12 Months Of Insider Transactions At Estée Lauder Companies

In the last twelve months, the biggest single sale by an insider was when the Executive Group President, Jane Hudis, sold US$2.0m worth of shares at a price of US$202 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$143. So it may not shed much light on insider confidence at current levels.

In total, Estée Lauder Companies insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders At Estée Lauder Companies Have Sold Stock Recently

Over the last three months, we've seen notably more insider selling, than insider buying, at Estée Lauder Companies. We note Executive VP & General Counsel Deirdre Stanley cashed in US$638k worth of shares. Meanwhile Independent Director Jennifer Hyman bought US$198k worth , as we said above . Generally this level of net selling might be considered a bit bearish.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Estée Lauder Companies insiders own about US$5.9b worth of shares (which is 11% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Estée Lauder Companies Insiders?

The insider sales have outweighed the insider buying, at Estée Lauder Companies, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 4 warning signs for Estée Lauder Companies you should be aware of, and 2 of these make us uncomfortable.

But note: Estée Lauder Companies may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.