Clover Health Investments Insider Confidence Rewarded, Stock Hits US$490m Market Cap

Clover Health Investments, Corp. (NASDAQ:CLOV) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 12% resulting in a US$55m addition to the company’s market value. As a result, the stock they originally bought for US$149.9k is now worth US$188.7k.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Clover Health Investments

The Last 12 Months Of Insider Transactions At Clover Health Investments

Notably, that recent purchase by Independent Director Anna Loengard was not the only time they bought Clover Health Investments shares this year. They previously made an even bigger purchase of US$110k worth of shares at a price of US$0.73 per share. Even though the purchase was made at a significantly lower price than the recent price (US$1.00), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Anna Loengard bought 188.71k shares over the last 12 months at an average price of US$0.79. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

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. Clover Health Investments insiders own about US$118m worth of shares (which is 24% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Clover Health Investments Insider Transactions Indicate?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Clover Health Investments. One for the watchlist, at least! 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. Case in point: We've spotted 3 warning signs for Clover Health Investments you should be aware of.

Of course Clover Health Investments may not be the best stock to buy. So you may wish to see this free collection of high quality 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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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.