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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.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
John DemseyGroup PresidentMay 910,000No67,632 shares12.9%
Sara MossEVPMay 750,000No73,293 shares + 285,939 options12.2%
Cedric ProuveGroup PresidentMay 751,032No152,124 shares + 419,648 options8.2%
Alexandra TrowerEVPMay 518,500No27,023 shares40.6%

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.

MonthInsider selling / sharesInsider buying / shares
May 2014129,5320
April 201400
March 201400
February 2014212,1720
January 201400
December 201300
November 201347,1250
October 201300
September 201333,4620
August 201300
July 201300
June 201300
May 201365,2020
April 201327,0260
March 2013959,2000
February 2013400,8990
January 201330,0000

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

The four insiders sold their shares after these results.

Outlook

Estée Lauder's fiscal 2014 guidance is as follows:

Local currency sales growth6%-7%
EPS$2.90-$2.97

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.

CompanyELCOTYLRLCYPG
Market Cap:28.04B6.04B104.51B222.94B
Employees:40,20010,00077,452121,000
Qtrly Rev Growth (yoy):0.11-0.04-0.00-0.00
Revenue:10.65B4.56B31.87B84.70B
Gross Margin:0.800.600.710.49
EBITDA:2.00B663.20M6.48B19.68B
Operating Margin:0.150.090.170.20
Net Income:1.04B134.10M4.10B10.69B
EPS:2.630.341.353.75
P/E:27.8646.4825.8021.96
PEG (5 yr expected):1.983.23N/A2.34
P/S:2.641.333.272.62

Estée Lauder has the second-highest P/S ratio among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
COTY0322,815
LRLCYN/AN/A
PG0772,247

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.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

Source: Estée Lauder: 4 Different Insiders Have Sold Shares This Month