We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Health Insurance Innovations, Inc. (NASDAQ:HIIQ), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Health Insurance Innovations
In the last twelve months, the biggest single sale by an insider was when the , Michael Kosloske, sold US$2.7m worth of shares at a price of US$26.21 per share. So what is clear is that an insider saw fit to sell at around the current price of US$22.41. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Notably Michael Kosloske was also the biggest buyer, having purchased US$2.1m worth of shares.
Happily, we note that in the last year insiders paid US$2.1m for 139k shares. On the other hand they divested 429k shares, for US$10m. In total, Health Insurance Innovations insiders sold more than they bought over the last year. They sold for an average price of about US$24.02. It’s not too encouraging to see that insiders have sold at below the current price. But we wouldn’t put too much weight on the insider selling. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Insiders at Health Insurance Innovations Have Sold Stock Recently
We’ve seen more insider selling than insider buying at Health Insurance Innovations recently. We note Michael Kosloske cashed in US$8.7m worth of shares. Meanwhile Michael Kosloske bought US$167k worth. Since the selling really does outweigh the buying, we’d say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Health Insurance Innovations insiders own about US$32m worth of shares. That equates to 9.7% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Health Insurance Innovations Insiders?
Unfortunately, there has been more insider selling of Health Insurance Innovations stock, than buying, in the last three months. And our longer term analysis of insider transactions didn’t bring confidence, either. Insiders own shares, but we’re still pretty cautious, given the history of sales. So we’d only buy after careful consideration. Of course, the future is what matters most. So if you are interested in Health Insurance Innovations, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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