Herbalife Insiders Added US$1.69m Of Stock To Their Holdings

Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Herbalife Ltd. (NYSE:HLF), it sends a favourable message to the company's shareholders.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Herbalife

The Last 12 Months Of Insider Transactions At Herbalife

In the last twelve months, the biggest single purchase by an insider was when Chairman & CEO Michael Johnson bought US$498k worth of shares at a price of US$8.07 per share. That means that an insider was happy to buy shares at above the current price of US$7.91. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months Herbalife 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. By clicking on the graph below, you can see the precise details of each insider transaction!

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

Insiders At Herbalife Have Bought Stock Recently

It's good to see that Herbalife insiders have made notable investments in the company's shares. We can see that insider Juan Mendoza paid US$132k for shares in the company. No-one sold. This makes one think the business has some good points.

Does Herbalife Boast High 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. Herbalife insiders own about US$12m worth of shares. That equates to 1.5% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Herbalife Insiders?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Insiders likely see value in Herbalife shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Herbalife. Our analysis shows 4 warning signs for Herbalife (2 make us uncomfortable!) and we strongly recommend you look at them before investing.

But note: Herbalife 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.