Community Health Systems Insiders Enjoying US$1.4m Appreciation On US$3.0m Investment
Insiders who bought Community Health Systems, Inc. (NYSE:CYH) stock in the last 12 months were richly rewarded last week. The company's market value increased by US$54m as a result of the stock's 10% gain over the same period. As a result, their original purchase of US$3.0m worth of stock is now worth US$4.4m.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for Community Health Systems
Community Health Systems Insider Transactions Over The Last Year
The Independent Non-Executive Chairman Wayne Smith made the biggest insider purchase in the last 12 months. That single transaction was for US$3.0m worth of shares at a price of US$3.00 each. Even though the purchase was made at a significantly lower price than the recent price (US$4.40), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Community Health Systems is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Community Health Systems 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. We usually like to see fairly high levels of insider ownership. It appears that Community Health Systems insiders own 7.8% of the company, worth about US$45m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Community Health Systems Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders own shares in Community Health Systems and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Community Health Systems. At Simply Wall St, we've found that Community Health Systems has 2 warning signs (1 can't be ignored!) that deserve your attention before going any further with your analysis.
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. We currently account for open market transactions and private dispositions, but not derivative transactions.
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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.
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