This Insider Has Just Sold Shares In DaVita

We wouldn't blame DaVita Inc. (NYSE:DVA) shareholders if they were a little worried about the fact that Kathleen Waters, the Chief Legal & Public Affairs Officer recently netted about US$1.1m selling shares at an average price of US$146. That sale reduced their total holding by 13% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for DaVita

The Last 12 Months Of Insider Transactions At DaVita

Over the last year, we can see that the biggest insider sale was by the Chief Compliance Officer, James Hearty, for US$3.0m worth of shares, at about US$120 per share. That means that an insider was selling shares at slightly below the current price (US$150). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 74% of James Hearty's holding.

In the last year DaVita insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership Of DaVita

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that DaVita insiders own 4.1% of the company, worth about US$521m. 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 DaVita Insider Transactions Indicate?

An insider hasn't bought DaVita stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But since DaVita is profitable and growing, we're not too worried by this. 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. Every company has risks, and we've spotted 2 warning signs for DaVita you should know about.

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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.

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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.