In the last year, many Chemed Corporation (NYSE:CHE) insiders sold a substantial stake in the company which may have sparked shareholders' attention. 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, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Chemed Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, David Williams, for US$3.5m worth of shares, at about US$584 per share. That means that an insider was selling shares at slightly below the current price (US$598). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 27% of David Williams's holding.
In the last year Chemed insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Chemed better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Chemed Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Chemed shares. In total, insiders sold US$11m 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 Of Chemed
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Chemed insiders own 1.9% of the company, currently worth about US$173m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Chemed Insider Transactions Indicate?
Insiders haven't bought Chemed stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Chemed. While conducting our analysis, we found that Chemed has 1 warning sign and it would be unwise to ignore this.
But note: Chemed 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.