European Wax Center's Stock Sinks To US$4.83, But Insiders Sold Even Lower

Despite the fact that European Wax Center, Inc.'s (NASDAQ:EWCZ) value has dropped 12% in the last week insiders who sold US$113k worth of stock in the past 12 months have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of US$5.81 is still lower than the current share price.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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European Wax Center Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Director, Nital Scott, for US$113k worth of shares, at about US$5.85 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$4.83. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Nital Scott.

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!

See our latest analysis for European Wax Center

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Insider Ownership Of European Wax Center

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, European Wax Center insiders have about 0.7% of the stock, worth approximately US$2.0m. We consider this fairly low insider ownership.

So What Do The European Wax Center Insider Transactions Indicate?

It doesn't really mean much that no insider has traded European Wax Center shares in the last quarter. The insider transactions at European Wax Center are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 1 warning sign for European Wax Center you should know about.

But note: European Wax Center 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 of direct interests only, but not derivative transactions or indirect interests.

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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.