Summary

Insider transactions for CVS Health Corporation (NYSE:CVS) over the last year have been characterized by a net number of shares sold by insiders, with some concern raised due to the lower sale price in relation to the current share price. However, recent insider buys were absent, but it's worth noting that directors own a fair chunk of the company, indicating some alignment between management and smaller shareholders.

Insider Transactions Over The Last Year

Inspecting the insider transactions for CVS Health Corporation over the last year, we find that insiders have been net sellers. This indicates that more shares were sold by insiders compared to those purchased. While it would be unwise to solely rely on insider transactions when making investment decisions, they can offer valuable insights that shouldn't be dismissed entirely.

An analysis of the key insider transaction over the last year reveals that the Executive VP & Group President, Prem Shah, sold US$2.3m worth of shares at about US$76.95 per share. We generally would like to see higher sale prices or no insider selling at all, but it might not indicate how they feel about the current share price when conducted at a level above the current share price of US$48.01. The only individual insider seller within this timeframe was Prem Shah. To put these sales into perspective, let's now examine the number of shares purchased and sold.

Over the past twelve months, insiders have acquired 10,180 shares for about US$554k. On the other hand, they divested a significantly larger amount of shares totaling 29,470, for approximately US$2.3m. Below you'll find a visual representation (by companies and individuals) of insider transactions over the last twelve months.

Who Sold Shares?

To know exactly who sold, for how much, and when, simply click on the graph below:

Insider Ownership

Another indicator that can show alignment between company leaders and other shareholders is the level of ownership stakes within the organization. The rule-of-thumb, generally preferred by analysts, is to see fairly high levels of insider ownership.

The current level of insider ownership in CVS Health is 0.09%, worth about US$57m. This figure might not be considered outstanding, but it's strong enough to indicate some degree of alignment between management and smaller shareholders.

The Implications Of These Findings

Despite the fact that there have been no recent insider transactions at CVS Health, the data collected over the last year paints an unsettling picture. However, we're pleased by the level of ownership displayed by insiders, which suggests that leaders are aligned with other shareholders to some extent.

Although understanding what insiders doing buying or selling is indeed beneficial, it's equally helpful to comprehend the potential risks that a particular company may face.

To get a full understanding of the situation at CVS Health, you should be aware of three key warning signs we've spotted, including one which shouldn't be ignored.