Tenet Healthcare Insiders Sold US$34m Of Shares Suggesting Hesitancy

Many Tenet Healthcare Corporation (NYSE:THC) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, 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

In the last twelve months, the biggest single sale by an insider was when the Chairman & CEO, Saumya Sutaria, sold US$15m worth of shares at a price of US$155 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$139). So it may not shed much light on insider confidence at current levels.

Insiders in Tenet Healthcare didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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

Insiders At Tenet Healthcare Have Sold Stock Recently

The last quarter saw substantial insider selling of Tenet Healthcare shares. Specifically, Executive Vice President of Commercial Operations Lisa Foo ditched US$624k 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

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Tenet Healthcare insiders own about US$140m worth of shares (which is 1.0% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Tenet Healthcare Tell Us?

An insider hasn't bought Tenet Healthcare stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since Tenet Healthcare 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. 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. When we did our research, we found 3 warning signs for Tenet Healthcare (1 can't be ignored!) that we believe deserve your full attention.

But note: Tenet Healthcare 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 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.