Tenet Healthcare Corporation (NYSE:THC) insiders sold US$27m worth of stock suggesting impending weakness.

By
Simply Wall St
Published
February 21, 2022
NYSE:THC
Source: Shutterstock

Many Tenet Healthcare Corporation (NYSE:THC) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Tenet Healthcare

The Last 12 Months Of Insider Transactions At Tenet Healthcare

Over the last year, we can see that the biggest insider sale was by the Executive Chairman, Ronald Rittenmeyer, for US$5.9m worth of shares, at about US$76.03 per share. That means that even when the share price was below the current price of US$80.51, an insider wanted to cash in some shares. 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. It is worth noting that this sale was only 12% of Ronald Rittenmeyer's holding.

Insiders in Tenet Healthcare didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NYSE:THC Insider Trading Volume February 21st 2022

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).

Tenet Healthcare Insiders Are Selling The Stock

The last three months saw significant insider selling at Tenet Healthcare. Specifically, insiders ditched US$11m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Tenet Healthcare Boast High 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. Tenet Healthcare insiders own about US$112m worth of shares (which is 1.3% 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 Tenet Healthcare Tell Us?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But it is good to see that Tenet Healthcare is growing earnings. While insiders do 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. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Tenet Healthcare has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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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