Stock Analysis

Chief Medical Officer Elissa Charbonneau Sold A Bunch Of Shares In Encompass Health

NYSE:EHC
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Some Encompass Health Corporation (NYSE:EHC) shareholders may be a little concerned to see that the Chief Medical Officer, Elissa Charbonneau, recently sold a substantial US$577k worth of stock at a price of US$69.58 per share. That sale reduced their total holding by 26% which is hardly insignificant, but far from the worst we've seen.

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Encompass Health Insider Transactions Over The Last Year

In fact, the recent sale by Elissa Charbonneau was the biggest sale of Encompass Health shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of US$69.50. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

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!

insider-trading-volume
NYSE:EHC Insider Trading Volume August 20th 2023

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Encompass Health

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. Encompass Health insiders own about US$150m worth of shares (which is 2.1% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Encompass Health Tell Us?

An insider sold Encompass Health shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Encompass Health is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing 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. At Simply Wall St, we found 2 warning signs for Encompass Health that deserve your attention before buying any shares.

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, 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.