Anyone interested in The Honest Company, Inc. (NASDAQ:HNST) should probably be aware that the Senior Vice President of Customer Sales, Jonathan Mayle, recently divested US$412k worth of shares in the company, at an average price of US$5.22 each. In particular, we note that the sale equated to a 99% reduction in their position size, which doesn't exactly instill confidence.

The Last 12 Months Of Insider Transactions At Honest Company

Notably, that recent sale by Jonathan Mayle is the biggest insider sale of Honest Company shares that we've seen in the last year. So what is clear is that an insider saw fit to sell at around the current price of US$5.07. While we don't usually like to see insider selling, it's more concerning if the sales take place 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.

In the last year Honest Company insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Honest Company better if I see some big insider buys.

Does Honest Company 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. Honest Company insiders own about US$54m worth of shares. That equates to 9.6% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Honest Company Insiders?

Insiders haven't bought Honest Company stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Honest Company.

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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.

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.