Stock Analysis

Prevalent Insider Selling Confirms the Teladoc Health's (NYSE:TDOC) Decline

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It is often said that the market takes a staircase up and an elevator down, but in some cases, stocks can take an elevator both ways.

Such was the case with Teladoc Health, Inc . ( NYSE: TDOC ). Over the last 2 years, it rose over 250% just to give back all the gains and return to the starting line.

View our latest analysis for Teladoc Health

Cathie Wood Averages Down

After dropping over 50% in 2021, Teladoc Health caught the eye of 3 ARK Invest ETFs that boosted their positions. ARK Innovation ETF (ARKK) added just over 53k shares, ARK Genomic Revolution ETF (ARKG) bought 33k, while ARK Fintech Innovation EFT (ARKF) bought 14,5k.

So far, the first week of 2022 has not reversed the negative trend, as all 6 of Cathie Wood's actively managed ETFs trade around 52-week lows, with the flagship Innovation fund down 15% YTD.

Teladoc Health Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO & Director, Jason Gorevic, for US$3.7m worth of shares, at about US$183 per share.While insider selling is negative, it is more negative if the shares are sold at a lower price.It's of some comfort that this sale was conducted at a price well above the current share price, which is US$82.18.So it is hard to draw any strong conclusion from it.

Last year, Teladoc Health insiders didn't buy any company stock.The chart below shows insider transactions (companies and individuals) over the previous year.If you want to know exactly who sold, for how much, and when, click on the graph below!

NYSE: TDOC Insider Trading Volume January 11th, 2022

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

Insiders at Teladoc Health Have Sold Stock Recently

The last quarter saw substantial insider selling of Teladoc Health shares.In total, Chief Human Resources Officer Arnnon Geshuri sold US$425k worth of shares in that time, and we didn't record any purchases whatsoever.

In light of this, it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own.Usually, the higher the insider ownership, the more likely it is that insiders will be incentivized to build the company for the long term.It's good to see that Teladoc Health insiders own 1.0% of the company, worth about US$134m.This kind of significant ownership by insiders generally increases the chance that the company is run in the interest of all shareholders.

So What Do The Teladoc Health Insider Transactions Indicate?

An insider sold Teladoc Health shares recently, but they didn't buy any.And there weren't any purchases to give us comfort over the last year.While insiders own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company.

However, the largest concern and likely the driver of the downside is the fact that the revenue growth rate is slowing down. Currently, guiding growth FY 2022 is between 25 and 30%, which is far behind 2020 or 2021.

In addition to knowing about insider transactions, it's beneficial to identify the risks facing Teladoc Health. You'd be interested to know that we found 4 warning signs for Teladoc Health , and we suggest you have a look.

But note: Teladoc Health may not be the best stock to buy . So take a peek at this free list of interesting companies with high ROE 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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Find out whether Teladoc Health is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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Simply Wall St analyst Stjepan Kalinic and Simply Wall St have no position in any of the companies mentioned. This article 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.

Stjepan Kalinic

Stjepan Kalinic

Stjepan is a writer and an analyst covering equity markets. As a former multi-asset analyst, he prefers to look beyond the surface and uncover ideas that might not be on retail investors' radar. You can find his research all over the internet, including Simply Wall St News, Yahoo Finance, Benzinga, Vincent, and Barron's.


Teladoc Health

Teladoc Health, Inc. provides virtual healthcare services in the United States and internationally.

Very undervalued with adequate balance sheet.