We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Ulta Beauty, Inc. (NASDAQ:ULTA).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Ulta Beauty Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, Dennis Eck, for US$12m worth of shares, at about US$341 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$226. So it may not shed much light on insider confidence at current levels.
We note that in the last year insiders divested 124k shares for a total of US$40m. In the last year Ulta Beauty insiders didn't buy any company stock. You can see the insider transactions (by 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders at Ulta Beauty Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Ulta Beauty. Specifically, Independent Director Sally Blount ditched US$113k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
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 0.7% of Ulta Beauty shares, worth about US$88m. 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 Ulta Beauty Insiders?
An insider hasn't bought Ulta Beauty stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But since Ulta Beauty is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We'd think twice before buying! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Ulta Beauty.
Of course Ulta Beauty 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.