Recent gains in Herbalife Nutrition Ltd. (NYSE:HLF) help add back some value on insider purchases worth US$2.3m, still down US$220k
Insiders who purchased US$2.3m worth of Herbalife Nutrition Ltd. (NYSE:HLF) shares over the past year recouped some of their losses after price gained 3.7% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$220k.
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.
Check out our latest analysis for Herbalife Nutrition
The Last 12 Months Of Insider Transactions At Herbalife Nutrition
The President John DeSimone made the biggest insider purchase in the last 12 months. That single transaction was for US$937k worth of shares at a price of US$21.54 each. That means that even when the share price was higher than US$17.36 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing 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. The average buy price was around US$19.18. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Herbalife Nutrition is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders At Herbalife Nutrition Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Herbalife Nutrition. Not only was there no selling that we can see, but they collectively bought US$483k worth of shares. This makes one think the business has some good points.
Insider Ownership Of Herbalife Nutrition
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Herbalife Nutrition insiders own about US$21m worth of shares. That equates to 1.3% 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 Do The Herbalife Nutrition Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Herbalife Nutrition we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Herbalife Nutrition. Case in point: We've spotted 3 warning signs for Herbalife Nutrition you should be aware of, and 2 of these make us uncomfortable.
But note: Herbalife Nutrition 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, but not derivative transactions.
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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.
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