Have Chemed Insiders Been Selling Stock?

We wouldn't blame Chemed Corporation (NYSE:CHE) shareholders if they were a little worried about the fact that Kevin McNamara, the CEO, President & Director recently netted about US$875k selling shares at an average price of US$438. However, that sale only accounted for 2.1% of their holding, so arguably it doesn't say much about their conviction.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

The Last 12 Months Of Insider Transactions At Chemed

In the last twelve months, the biggest single sale by an insider was when the Executive Vice President, Nicholas Westfall, sold US$4.2m worth of shares at a price of US$422 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$441. 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 100% of Nicholas Westfall's stake.

Happily, we note that in the last year insiders paid US$159k for 345.00 shares. On the other hand they divested 24.97k shares, for US$12m. In total, Chemed insiders sold more than they bought over the last year. The sellers received a price of around US$481, on average. It's not particularly great to see insiders were selling shares around current prices. Since insiders sell for many reasons, we wouldn't put too much weight on it. 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!

Check out our latest analysis for Chemed

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Chemed insiders own 1.5% of the company, worth about US$96m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Chemed Tell Us?

Insiders sold Chemed shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. 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. Case in point: We've spotted 1 warning sign for Chemed you should be aware of.

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 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.