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In the last year, multiple insiders have substantially increased their holdings of CVS Health Corporation (NYSE:CVS) stock, indicating that insiders' optimism about the company's prospects has increased.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for CVS Health
CVS Health Insider Transactions Over The Last Year
The 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. That means that an insider was happy to buy shares at above the current price of US$65.75. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months CVS Health insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insiders At CVS Health Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at CVS Health. Specifically, Independent Director Michael Mahoney bought US$2.0m worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Does CVS Health Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that CVS Health insiders own 0.1% of the company, worth about US$80m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The CVS Health Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Insiders likely see value in CVS Health shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing CVS Health. To that end, you should learn about the 2 warning signs we've spotted with CVS Health (including 1 which is a bit concerning).