Have Clover Health Investments, Corp. (NASDAQ:CLOV) Insiders Been Selling Their Stock?

We wouldn't blame Clover Health Investments, Corp. (NASDAQ:CLOV) shareholders if they were a little worried about the fact that Chamath Palihapitiya, a company insider, recently netted about US$20m selling shares at an average price of US$1.77. That sale reduced their total holding by 37% which is hardly insignificant, but far from the worst we've seen.

Our analysis indicates that CLOV is potentially overvalued!

The Last 12 Months Of Insider Transactions At Clover Health Investments

In fact, the recent sale by Chamath Palihapitiya was the biggest sale of Clover Health Investments shares made by an insider individual in the last twelve months, according to our records. 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$1.56. So it is hard to draw any strong conclusion from it.

Happily, we note that in the last year insiders paid US$11m for 1.92m shares. But they sold 11.01m shares for US$20m. 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!

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).

Does Clover Health Investments Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Clover Health Investments insiders own 23% of the company, worth about US$168m. 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 Clover Health Investments Tell Us?

An insider sold Clover Health Investments shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 4 warning signs for Clover Health Investments that deserve your attention before buying any shares.

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, 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.