We’d be surprised if PRA Health Sciences, Inc. (NASDAQ:PRAH) shareholders haven’t noticed that the Executive VP & CFO, Michael Bonello, recently sold US$323k worth of stock at US$87.97 per share. That sale was 14% of their holding, so it does make us raise an eyebrow.
The Last 12 Months Of Insider Transactions At PRA Health Sciences
In fact, the recent sale by Michael Bonello was the biggest sale of PRA Health Sciences shares made by an insider individual in the last twelve months, according to our records. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$96.50. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it’s only a weak signal. It is worth noting that this sale was only 14% of Michael Bonello’s holding.
The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like PRA Health Sciences better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does PRA Health Sciences Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.2% of PRA Health Sciences shares, worth about US$15m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The PRA Health Sciences Insider Transactions Indicate?
An insider sold stock recently, but they haven’t been buying. Looking to the last twelve months, our data doesn’t show any insider buying. But it is good to see that PRA Health Sciences is growing earnings. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’re in no rush to buy! While we like knowing what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we’ve identified 2 warning signs with PRA Health Sciences and understanding them should be part of your investment process.
But note: PRA Health Sciences 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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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