Estée Lauder: 4 Different Insiders Have Sold Shares This Month

May.12.14 | About: The Estée (EL)

Summary

4 insiders sold Estée Lauder stock within one month.

The stock was not purchased by any insiders in the month of intensive selling.

3 of these 4 insiders decreased their holdings by more than 10%.

The Estée Lauder Companies (NYSE:EL) manufactures, markets, and sells skin care, makeup, fragrance, and hair care products worldwide.

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Insider selling during the last 30 days

Here is a table of Estée Lauder's insider activity during the last 30 days.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
John Demsey Group President May 9 10,000 No 67,632 shares 12.9%
Sara Moss EVP May 7 50,000 No 73,293 shares + 285,939 options 12.2%
Cedric Prouve Group President May 7 51,032 No 152,124 shares + 419,648 options 8.2%
Alexandra Trower EVP May 5 18,500 No 27,023 shares 40.6%
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There have been 129,532 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Estée Lauder's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
May 2014 129,532 0
April 2014 0 0
March 2014 0 0
February 2014 212,172 0
January 2014 0 0
December 2013 0 0
November 2013 47,125 0
October 2013 0 0
September 2013 33,462 0
August 2013 0 0
July 2013 0 0
June 2013 0 0
May 2013 65,202 0
April 2013 27,026 0
March 2013 959,200 0
February 2013 400,899 0
January 2013 30,000 0
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There have been 1,904,618 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Estée Lauder reported the fiscal 2014 third-quarter, which ended March 31, financial results on May 2 with the following highlights:

Revenue $2.5 billion
Net income $213.2 million
Cash $1.5 billion
Debt $1.3 billion
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The four insiders sold their shares after these results.

Outlook

Estée Lauder's fiscal 2014 guidance is as follows:

Local currency sales growth 6%-7%
EPS $2.90-$2.97
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Competition

Estée Lauder's competitors include Coty Inc. (NYSE:COTY), L'Oreal SA (OTCPK:LRLCY), and The Procter & Gamble Company (NYSE:PG). Here is a table comparing these companies.

Company EL COTY LRLCY PG
Market Cap: 28.04B 6.04B 104.51B 222.94B
Employees: 40,200 10,000 77,452 121,000
Qtrly Rev Growth (yoy): 0.11 -0.04 -0.00 -0.00
Revenue: 10.65B 4.56B 31.87B 84.70B
Gross Margin: 0.80 0.60 0.71 0.49
EBITDA: 2.00B 663.20M 6.48B 19.68B
Operating Margin: 0.15 0.09 0.17 0.20
Net Income: 1.04B 134.10M 4.10B 10.69B
EPS: 2.63 0.34 1.35 3.75
P/E: 27.86 46.48 25.80 21.96
PEG (5 yr expected): 1.98 3.23 N/A 2.34
P/S: 2.64 1.33 3.27 2.62
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Estée Lauder has the second-highest P/S ratio among these four companies.

Here is a table of these competitors' insider activities this year.

Company Insider buying / shares Insider selling / shares
COTY 0 322,815
LRLCY N/A N/A
PG 0 772,247
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Procter & Gamble has also seen intensive insider selling during the last 30 days.

Conclusion

There have been four different insiders selling Estée Lauder, and there have not been any insiders buying Estée Lauder during the last 30 days. Three of these four insiders decreased their holdings by more than 10%. Estée Lauder has an insider ownership of 2.30%.

Before going short Estée Lauder, I would like to get a bearish confirmation from the Point & Figure chart. The main reason for the proposed short entry is the intensive insider-selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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