e.l.f. Beauty Insiders Sell US$56m Of Stock, Possibly Signalling Caution

The fact that multiple e.l.f. Beauty, Inc. (NYSE:ELF) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for e.l.f. Beauty

The Last 12 Months Of Insider Transactions At e.l.f. Beauty

In the last twelve months, the biggest single sale by an insider was when the Chairman, Tarang Amin, sold US$7.9m worth of shares at a price of US$185 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$106. So it may not shed much light on insider confidence at current levels.

Insiders in e.l.f. Beauty didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. 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 small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that e.l.f. Beauty insiders own 2.0% of the company, worth about US$119m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The e.l.f. Beauty Insider Transactions Indicate?

It doesn't really mean much that no insider has traded e.l.f. Beauty shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of e.l.f. Beauty insider transactions don't fill us with confidence. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we found 1 warning sign for e.l.f. Beauty that deserve your attention before buying any shares.

But note: e.l.f. Beauty 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.