Stock Analysis

Have Tilly's, Inc. (NYSE:TLYS) Insiders Been Selling Their Stock?

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NYSE:TLYS
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Anyone interested in Tilly's, Inc. (NYSE:TLYS) should probably be aware that the Independent Director, Bernard Zeichner, recently divested US$187k worth of shares in the company, at an average price of US$12.47 each. That sale was 24% of their holding, so it does make us raise an eyebrow.

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The Last 12 Months Of Insider Transactions At Tilly's

In fact, the recent sale by Bernard Zeichner was the biggest sale of Tilly's shares made by an insider individual in the last twelve months, according to our records. So what is clear is that an insider saw fit to sell at around the current price of US$12.21. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Over the last year, we can see that insiders have bought 58.49k shares worth US$260k. But they sold 45.00k shares for US$420k. All up, insiders sold more shares in Tilly's than they bought, over the last year. The average sell price was around US$9.34. It's not particularly great to see insiders were selling shares at below recent prices. But we wouldn't put too much weight on the insider selling. 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:TLYS Insider Trading Volume March 19th 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 Tilly's

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 26% of Tilly's shares, worth about US$98m. 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 Do The Tilly's Insider Transactions Indicate?

Insiders haven't bought Tilly's stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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 Tilly's you should know about.

Of course Tilly's 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, but not derivative transactions.

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What are the risks and opportunities for Tilly's?

Tilly’s, Inc. operates as a specialty retailer of casual apparel, footwear, accessories, and hardgoods for young men and women, and boys and girls in the United States.

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Rewards

  • Price-To-Earnings ratio (12.2x) is below the US market (15.5x)

  • Earnings are forecast to grow 16.67% per year

Risks

  • High level of non-cash earnings

  • Profit margins (3.1%) are lower than last year (8.1%)

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