Stock Analysis

Selling AdaptHealth Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

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NasdaqCM:AHCO
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Despite the fact that AdaptHealth Corp.'s (NASDAQ:AHCO) value has dropped 10.0% in the last week insiders who sold US$64m worth of stock in the past 12 months have had less success. Insiders might have been better off holding onto their shares, given that the average selling price of US$14.84 is still below the current share price.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for AdaptHealth

AdaptHealth Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Wayne Quasha, for US$51m worth of shares, at about US$13.98 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$8.28. So it is hard to draw any strong conclusion from it. Notably Wayne Quasha was also the biggest buyer, having purchased US$5.0m worth of shares.

Over the last year, we can see that insiders have bought 222.52k shares worth US$5.0m. But they sold 4.33m shares for US$64m. All up, insiders sold more shares in AdaptHealth than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NasdaqCM:AHCO Insider Trading Volume December 11th 2023

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

AdaptHealth Insiders Are Selling The Stock

Over the last three months, we've seen a bit of insider selling at AdaptHealth. Independent Director David Williams divested only US$21k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn't bother us.

Does AdaptHealth Boast High Insider Ownership?

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. AdaptHealth insiders own 14% of the company, currently worth about US$161m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About AdaptHealth Insiders?

We did not see any insider buying in the last three months, but we did see selling. But given the selling was modest, we're not worried. While we feel good about high insider ownership of AdaptHealth, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of AdaptHealth.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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