Favourable Signals For eHealth: Numerous Insiders Acquired Stock

Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of eHealth, Inc. (NASDAQ:EHTH), that sends out a positive message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for eHealth

The Last 12 Months Of Insider Transactions At eHealth

In the last twelve months, the biggest single purchase by an insider was when CEO & Director Francis Soistman bought US$204k worth of shares at a price of US$4.07 per share. That implies that an insider found the current price of US$4.48 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.

While eHealth insiders bought shares during the last year, they didn't sell. 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!

eHealth is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At eHealth Have Bought Stock Recently

It's good to see that eHealth insiders have made notable investments in the company's shares. In total, insiders bought US$358k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Does eHealth Boast High 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. Insiders own 4.9% of eHealth shares, worth about US$5.9m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About eHealth Insiders?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that eHealth insiders are reasonably well aligned, and optimistic for the future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that eHealth has 3 warning signs and it would be unwise to ignore these.

But note: eHealth 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.