Have Chemed Corporation (NYSE:CHE) Insiders Been Selling Their Stock?

We wouldn't blame Chemed Corporation (NYSE:CHE) shareholders if they were a little worried about the fact that David Williams, the Executive VP & CFO recently netted about US$2.1m selling shares at an average price of US$523. That sale reduced their total holding by 16% which is hardly insignificant, but far from the worst we've seen.

See our latest analysis for Chemed

The Last 12 Months Of Insider Transactions At Chemed

In fact, the recent sale by Executive VP & CFO David Williams was not their only sale of Chemed shares this year. Earlier in the year, they fetched US$497 per share in a -US$4.0m sale. That means that even when the share price was below the current price of US$526, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 25% of David Williams's stake.

Over the last year we saw more insider selling of Chemed shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Chemed better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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. Chemed insiders own about US$171m worth of shares (which is 2.2% 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 Chemed Insider Transactions Indicate?

The stark truth for Chemed is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Chemed. Every company has risks, and we've spotted 1 warning sign for Chemed you should know about.

Of course Chemed 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.