Insiders may be rethinking their US$2.4m Herbalife Nutrition Ltd. (NYSE:HLF) investment now that the company has lost US$149m in value

Insiders who acquired US$2.4m worth of Herbalife Nutrition Ltd.’s (NYSE:HLF) stock at an average price of US$25.65 in the past 12 months may be dismayed by the recent 6.5% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$2.0m.

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

Herbalife Nutrition Insider Transactions Over The Last Year

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 implies that an insider found the current price of US$21.56 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it’s less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Herbalife Nutrition share holders is that insiders were buying at near the current price.

While Herbalife Nutrition insiders bought shares during the last year, they didn’t sell. They paid about US$25.65 on average. I’d consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NYSE:HLF Insider Trading Volume July 2nd 2022

Herbalife Nutrition is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Herbalife Nutrition Insiders Bought Stock Recently

It’s good to see that Herbalife Nutrition insiders have made notable investments in the company’s shares. Overall, six insiders shelled out US$1.7m for shares in the company — and none sold. This makes one think the business has some good points.

Does Herbalife Nutrition Boast High Insider Ownership?

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. It appears that Herbalife Nutrition insiders own 1.7% of the company, worth about US$37m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

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. Insiders likely see value in Herbalife Nutrition shares, given these transactions (along with notable insider ownership of the company). While we like knowing what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that Herbalife Nutrition is showing 3 warning signs in our investment analysis, and 2 of those are a bit concerning…

Of course Herbalife Nutrition 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.

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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