Have Herbalife Nutrition Ltd. (NYSE:HLF) Insiders Been Selling Their Stock?

By
Simply Wall St
Published
May 27, 2021
NYSE:HLF

We'd be surprised if Herbalife Nutrition Ltd. (NYSE:HLF) shareholders haven't noticed that the Director, John Tartol, recently sold US$258k worth of stock at US$51.62 per share. However, the silver lining is that the sale only reduced their total holding by 1.6%, so we're hesitant to read anything much into it, on its own.

Check out our latest analysis for Herbalife Nutrition

The Last 12 Months Of Insider Transactions At Herbalife Nutrition

In fact, the recent sale by Director John Tartol was not their only sale of Herbalife Nutrition shares this year. They previously made an even bigger sale of -US$2.7m worth of shares at a price of US$48.83 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$52.73. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 15% of John Tartol's stake.

Herbalife Nutrition insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NYSE:HLF Insider Trading Volume May 28th 2021

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

Insider Ownership of Herbalife Nutrition

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Herbalife Nutrition insiders own about US$234m worth of shares (which is 4.1% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Herbalife Nutrition Tell Us?

An insider sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Herbalife Nutrition makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. To that end, you should learn about the 2 warning signs we've spotted with Herbalife Nutrition (including 1 which is significant).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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