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As Aveanna Healthcare Holdings Inc.'s market cap (NASDAQ:AVAH) drops to US$373m, insiders might be questioning their decision to buy earlier this year

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The recent 19% drop in Aveanna Healthcare Holdings Inc.'s (NASDAQ:AVAH) stock could come as a blow to insiders who purchased US$712k worth of stock at an average buy price of US$3.85 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$373k which is not ideal.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Aveanna Healthcare Holdings

The Last 12 Months Of Insider Transactions At Aveanna Healthcare Holdings

In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Rodney Windley bought US$105k worth of shares at a price of US$2.91 per share. That means that an insider was happy to buy shares at above the current price of US$2.02. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While Aveanna Healthcare Holdings insiders bought shares during the last year, they didn't sell. The average buy price was around US$3.85. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders at Aveanna Healthcare Holdings Have Bought Stock Recently

Over the last quarter, Aveanna Healthcare Holdings insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$407k worth of shares. This is a positive in our book as it implies some confidence.

Does Aveanna Healthcare Holdings Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Aveanna Healthcare Holdings insiders own about US$12m worth of shares. That equates to 3.2% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Aveanna Healthcare Holdings Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Aveanna Healthcare Holdings shares, given these transactions (along with notable insider ownership of the company). Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Aveanna Healthcare Holdings.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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