Some CVS Health Corporation (NYSE:CVS) shareholders may be a little concerned to see that the Executive VP, Prem Shah, recently sold a substantial US$2.3m worth of stock at a price of US$76.95 per share. That's a big disposal, and it decreased their holding size by 40%, which is notable but not too bad.

The Last 12 Months Of Insider Transactions At CVS Health

Notably, that recent sale by Prem Shah is the biggest insider sale of CVS Health shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$77.10. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. 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 40%of Prem Shah's holding.

Over the last year, we can see that insiders have bought 16.00k shares worth US$1.1m. But insiders sold 55.23k shares worth US$4.2m. In total, CVS Health insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does CVS Health Boast High Insider Ownership?

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. CVS Health insiders own about US$155m worth of shares (which is 0.2% of the company). 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 CVS Health Insiders?

An insider hasn't bought CVS Health stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, CVS Health makes money, and is growing profits. 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. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of CVS Health.

But note: CVS Health 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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