Have e.l.f. Beauty Insiders Been Selling Stock?

We wouldn't blame e.l.f. Beauty, Inc. (NYSE:ELF) shareholders if they were a little worried about the fact that Tarang Amin, the Chairman recently netted about US$13m selling shares at an average price of US$166. However, that sale only accounted for 5.6% of their holding, so arguably it doesn't say much about their conviction.

See our latest analysis for e.l.f. Beauty

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

Notably, that recent sale by Tarang Amin is the biggest insider sale of e.l.f. Beauty shares that we've seen in the last year. That means that even when the share price was below the current price of US$176, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 5.6% of Tarang Amin's holding.

e.l.f. Beauty insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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

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. 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 3.0% of the company, worth about US$296m. 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?

Insiders sold e.l.f. Beauty shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But it is good to see that e.l.f. Beauty is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing e.l.f. Beauty. Every company has risks, and we've spotted 2 warning signs for e.l.f. Beauty you should know about.

Of course e.l.f. Beauty may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.