Over the past year, many CVS Health Corporation (NYSE:CVS) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

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 Last 12 Months Of Insider Transactions At CVS Health

Over the last year, we can see that the biggest insider sale was by the Executive VP, Prem Shah, for US$2.3m worth of shares, at about US$76.95 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$59.06). So it may not shed much light on insider confidence at current levels.

In the last twelve months insiders purchased 12.18k shares for US$695k. But insiders sold 55.23k shares worth US$4.2m. All up, insiders sold more shares in CVS Health than they bought, over the last year. 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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insiders At CVS Health Have Bought Stock Recently

Over the last quarter, CVS Health insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$554k worth of shares. This could be interpreted as suggesting a positive outlook.

Insider Ownership

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. It's great to see that CVS Health insiders own 0.1% of the company, worth about US$111m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At CVS Health Tell Us?

It is good to see recent purchasing. However, the longer term transactions are not so encouraging. The recent buying by some insiders , along with high insider ownership, suggest that CVS Health insiders are fairly aligned, and optimistic. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing CVS Health. For example - CVS Health has 1 warning sign we think 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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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com