Stock Analysis

Having purchased US$1.8m worth of Herbalife Nutrition Ltd. (NYSE:HLF) stock, the recent 4.0% pullback is not what insiders may have expected

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NYSE:HLF
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The recent 4.0% drop in Herbalife Nutrition Ltd.'s (NYSE:HLF) stock could come as a blow to insiders who purchased US$1.8m worth of stock at an average buy price of US$22.13 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$1.7m which is not ideal.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

However if you'd rather see where the opportunities and risks are within HLF's industry, you can check out our analysis on the US Personal Products industry.

The Last 12 Months Of Insider Transactions At Herbalife Nutrition

Over the last year, we can see that the biggest insider purchase was by President John DeSimone for US$937k worth of shares, at about US$21.54 per share. That means that an insider was happy to buy shares at above the current price of US$20.73. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months Herbalife Nutrition insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart 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 September 30th 2022

Herbalife Nutrition is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership Of Herbalife Nutrition

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 1.8% of Herbalife Nutrition shares, worth about US$36m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Herbalife Nutrition Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Herbalife Nutrition and we see no evidence to suggest they are worried about the future. 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. Every company has risks, and we've spotted 2 warning signs for Herbalife Nutrition you should know about.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Herbalife Nutrition is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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About NYSE:HLF

Herbalife Nutrition

Herbalife Nutrition Ltd. offers nutrition solutions in North America, Mexico, South and Central America, Europe, the Middle East, Africa, China, and rest of Asia Pacific.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation5
Future Growth0
Past Performance2
Financial Health1
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Undervalued with questionable track record.