Option Care Health Insiders Added US$3.22m Of Stock To Their Holdings

Multiple insiders secured a larger position in Option Care Health, Inc. (NASDAQ:OPCH) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.

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.

View our latest analysis for Option Care Health

The Last 12 Months Of Insider Transactions At Option Care Health

Over the last year, we can see that the biggest insider purchase was by Independent Non Executive Chairman of the Board Harry M. Kraemer for US$1.9m worth of shares, at about US$34.63 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$31.80). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Happily, we note that in the last year insiders paid US$3.2m for 96.97k shares. On the other hand they divested 1.98k shares, for US$63k. In the last twelve months there was more buying than selling by Option Care Health insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Option Care Health Have Bought Stock Recently

There has been significantly more insider buying, than selling, at Option Care Health, over the last three months. In total, Independent Non Executive Chairman of the Board Harry M. Kraemer bought US$1.1m worth of shares in that time. On the other hand, Chief Human Resources & Diversity Officer Michael Bavaro netted US$63k by selling. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

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. Insiders own 0.6% of Option Care Health shares, worth about US$34m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Option Care Health Tell Us?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Option Care Health insiders are well aligned, and that they may think the share price is too low. 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. To that end, you should learn about the 3 warning signs we've spotted with Option Care Health (including 1 which makes us a bit uncomfortable).

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.