Bullish CVS Health Insiders Loaded Up On US$2.56m Of Stock
Multiple insiders secured a larger position in CVS Health Corporation (NYSE:CVS) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company’s prospects.
Although we don’t think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Lead Independent Director Michael Mahoney made the biggest insider purchase in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$66.70 each. So it’s clear an insider wanted to buy, at around the current price, which is US$69.20. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it’s less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for CVS Health share holders is that insiders were buying at near the current price.
While CVS Health insiders bought shares during the last year, they didn’t sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Check out our latest analysis for CVS Health
CVS Health is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Over the last quarter, CVS Health insiders have spent a meaningful amount on shares. We can see that Lead Independent Director Michael Mahoney paid US$2.0m for shares in the company. No-one sold. This makes one think the business has some good points.
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 0.1% of CVS Health shares, worth about US$87m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest CVS Health insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing CVS Health. For instance, we’ve identified 2 warning signs for CVS Health (1 is a bit concerning) you should be aware of.
But note: CVS Health 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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