We wouldn't blame Ralph Lauren Corporation (NYSE:RL) shareholders if they were a little worried about the fact that Jane Nielsen, the Chief Operating Officer recently netted about US$12m selling shares at an average price of US$171. Probably the most concerning element of the whole transaction is that the disposal amounted to 88% of their entire holding.
Ralph Lauren Insider Transactions Over The Last Year
Notably, that recent sale by Jane Nielsen is the biggest insider sale of Ralph Lauren shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (US$185). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was 88% of Jane Nielsen's stake.
In the last year Ralph Lauren insiders didn't buy any company stock. 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!
I will like Ralph Lauren better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Does Ralph Lauren Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Ralph Lauren insiders own 32% of the company, currently worth about US$3.7b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Ralph Lauren Tell Us?
An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But since Ralph Lauren is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ralph Lauren. For example - Ralph Lauren has 2 warning signs we think you should be aware of.
But note: Ralph Lauren 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.