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Insiders sitting comfortably on a US$143k profit after buying Ralph Lauren Corporation (NYSE:RL) stock worth US$1.2m last year

Ralph Lauren Corporation (NYSE:RL) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 3.2% decline in the stock price. After taking the recent loss into consideration, the US$1.2m worth of stock they bought is now worth US$1.4m, indicating that their investment yielded a positive return.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Ralph Lauren

Ralph Lauren Insider Transactions Over The Last Year

The Executive VP & Chief Commercial Officer, Andrew Smith, made the biggest insider sale in the last 12 months. That single transaction was for US$1.2m worth of shares at a price of US$120 each. So what is clear is that an insider saw fit to sell at around the current price of US$114. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign. Andrew Smith was the only individual insider to sell shares in the last twelve months.

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Happily, we note that in the last year insiders paid US$1.2m for 12.17k shares. But insiders sold 9.76k shares worth US$1.2m. In total, Ralph Lauren insiders bought more than they sold over the last year. The average buy price was around US$102. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Ralph Lauren Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Ralph Lauren. We can see that Lead Independent Director Hubert Joly paid US$990k for shares in the company. No-one sold. This makes one think the business has some good points.

Does Ralph Lauren Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Ralph Lauren insiders own 27% of the company, worth about US$2.3b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Ralph Lauren Insider Transactions Indicate?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Ralph Lauren. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 3 warning signs for Ralph Lauren and we suggest you have a look.

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, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.