Chemed Insiders Sold US$15m Of Shares Suggesting Hesitancy

The fact that multiple Chemed Corporation (NYSE:CHE) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Chemed

Chemed Insider Transactions Over The Last Year

The VP & Director, Thomas Hutton, made the biggest insider sale in the last 12 months. That single transaction was for US$2.8m worth of shares at a price of US$576 each. So we know that an insider sold shares at around the present share price of US$550. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

In total, Chemed insiders sold more 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Chemed better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Chemed Have Sold Stock Recently

There was substantially more insider selling, than buying, of Chemed shares over the last three months. In that time, insiders dumped US$2.1m worth of shares. On the flip side, VP, Secretary & Chief Legal Officer Brian Judkins spent US$75k on purchasing shares (as mentioned above) . Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Insider Ownership

Many investors like to check how much of a company is owned by 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. It's great to see that Chemed insiders own 1.6% of the company, worth about US$135m. 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 Does This Data Suggest About Chemed Insiders?

The insider sales have outweighed the insider buying, at Chemed, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Chemed is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. While it's good to be aware of 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. For example - Chemed has 1 warning sign we think you should be aware of.

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.

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.