As Clover Health Investments, Corp. (NASDAQ:CLOV) drops to US$1.0b market cap, insiders might rethink their US$11m stock purchase earlier this year

The recent 8.2% drop in Clover Health Investments, Corp.'s (NASDAQ:CLOV) stock could come as a blow to insiders who purchased US$11m worth of stock at an average buy price of US$5.47 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$4.1m which is not ideal.

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.

Check out our latest analysis for Clover Health Investments

Clover Health Investments Insider Transactions Over The Last Year

The insider Chamath Palihapitiya made the biggest insider purchase in the last 12 months. That single transaction was for US$10.0m worth of shares at a price of US$5.75 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$2.14). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Clover Health Investments insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Clover Health Investments is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Clover Health Investments Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Clover Health Investments insiders own about US$251m worth of shares (which is 25% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Clover Health Investments Insiders?

It doesn't really mean much that no insider has traded Clover Health Investments shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Clover Health Investments insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Clover Health Investments. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Clover Health Investments.

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, but not derivative transactions.

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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.