Lawrence Gibbs Is The Independent Director of Universal Health Services, Inc. (NYSE:UHS) And They Just Sold 41% Of Their Shares

By
Simply Wall St
Published
March 16, 2022
NYSE:UHS
Source: Shutterstock

We'd be surprised if Universal Health Services, Inc. (NYSE:UHS) shareholders haven't noticed that the Independent Director, Lawrence Gibbs, recently sold US$200k worth of stock at US$153 per share. That sale was 41% of their holding, so it does make us raise an eyebrow.

Check out our latest analysis for Universal Health Services

The Last 12 Months Of Insider Transactions At Universal Health Services

In the last twelve months, the biggest single sale by an insider was when the Lead Independent Director, Eileen McDonnell, sold US$571k worth of shares at a price of US$156 per share. So what is clear is that an insider saw fit to sell at around the current price of US$149. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

Insiders in Universal Health Services 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. 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:UHS Insider Trading Volume March 16th 2022

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 of Universal Health Services

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 incentivised to build the company for the long term. Universal Health Services insiders own 12% of the company, currently worth about US$1.4b 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.

So What Does This Data Suggest About Universal Health Services Insiders?

An insider sold Universal Health Services shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Universal Health Services makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Universal Health Services. At Simply Wall St, we found 2 warning signs for Universal Health Services that deserve your attention before buying any shares.

But note: Universal Health Services 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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