Stock Analysis

Insiders who bought Signify Health, Inc. (NYSE:SGFY) last year must be regretting not buying more as market cap hits US$7.2b

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Last week, Signify Health, Inc. (NYSE:SGFY) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 5.0% last week, resulting in a US$260m increase in the company's market worth. Put another way, the original US$253k acquisition is now worth US$635k.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Signify Health

The Last 12 Months Of Insider Transactions At Signify Health

In the last twelve months, the biggest single purchase by an insider was when President Steven Senneff bought US$126k worth of shares at a price of US$12.55 per share. Even though the purchase was made at a significantly lower price than the recent price (US$30.49), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Signify Health insiders may have bought shares in the last year, but they didn't sell any. 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!

NYSE:SGFY Insider Trading Volume March 29th 2023

Signify Health is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. Signify Health insiders own 1.5% of the company, currently worth about US$108m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Signify Health Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Signify Health insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Signify Health. At Simply Wall St, we found 1 warning sign for Signify Health that deserve your attention before buying any shares.

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, but not derivative transactions.

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