We recently compiled a list of the 11 Most Expensive Stocks Insiders Are Buying Recently. In this article, we are going to take a look at where The Estée Lauder Companies Inc. (NYSE:EL) stands against the other expensive stocks. We previously covered the 10 cheapest stocks insiders are buying recently.
The broader market returned around 21% over the past 12 months, and it is also doing well this year. Since the beginning of the year, it has moved 3.45%. As the January effect starts to cool off, we thought it could be useful to look into some of the stocks that insiders have recently not been shy to spend money on. Instead of the standard P/E ratio, today we decided to focus on the average price per share.
Why are expensive stocks worth considering? High-priced stocks are often perceived as more reliable long-term investments due to the belief that their higher price reflects a history of strong performance and lower volatility. While in investing there is not a single rule that guarantees results, taking more factors into account, such as price, insider trading activity, recent results, analyst coverage, and recent company moves and strategies, might help.
Both insider selling and buying can be driven by various motives that’s why it is important to consider these moves within the broader context of the company’s fundamentals, industry trends, and overall market conditions. Due diligence before any investment is of crucial importance. However, insider trading activity, combined with other relevant factors, can provide valuable insights into a company’s capabilities, helping investors make more informed decisions.
What are some of the most expensive stocks insiders have been buying over the last 30 days? To find out, we used Insider Monkey’s insider trading stock screener, focusing only on stocks where at least two insiders had purchased shares recently. From there, we ranked the 10 stocks with the highest average price per share.
Our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds, focusing on insider trading and stock picks from hedge fund investor newsletters and conferences. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
With each stock, we note the average price per share of these purchases and the stock’s market capitalization.
A close-up of a makeup artist carefully applying Makeup Products to an clients face.
The Estée Lauder Companies Inc. (NYSE:EL)
Average price per share: $66.16
Market capitalization: $25.82 billion
The The Estée Lauder Companies Inc. (NYSE:EL) is the second largest cosmetics company in the world after L’Oréal. The New York City-headquartered company offers a wide range of beauty, skincare, perfume, makeup, and hair care products. Insider Monkey recently shared A Bull Case Theory for The Estée Lauder. In summary, the thesis acknowledges the company’s “Beauty Reimagined” strategy under new leadership from Stéphane de La Faverie and Akhil Shrivastava. This initiative aims to restore sustainable sales growth and achieve double-digit operating income growth in the coming years. Under the new strategy is a restructuring plan that will eliminate up to 7,000 jobs to streamline operations. The initiative is expected to result in annual savings of $800,000 million to $1 billion.
On February 5th, two insiders, among which is the company’s CFO, acquired a total of $8.74 million worth of The Estée Lauder shares at an average price of $66.16 per share. The stock is currently trading at $71.70, having lost 4.45% year-to-date. Over the past 12 months, The Estée Lauder shares declined 51.39%.
Twenty analysts have coverage on The Estée Lauder Companies Inc. (NYSE:EL) stock, and their average rating is “Hold.” A 12-month price target is $81.33, which is an increase of 13.31% from the previous price, as per data from StockAnalysis.
Overall EL ranks 5th on our list of the most expensive stocks insiders are buying recently. While we acknowledge the potential of EL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than EL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.