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Insiders purchases in Encompass Health Corporation (NYSE:EHC) last year yet to pay off, remain down US$11k despite recent gains

Some of the losses seen by insiders who purchased US$187k worth of Encompass Health Corporation (NYSE:EHC) shares over the past year were recovered after the stock increased by 13% over the past week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$11k.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Encompass Health

The Last 12 Months Of Insider Transactions At Encompass Health

In fact, the recent purchase by Gregory Carmichael was the biggest purchase of Encompass Health shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, at around the current price, which is US$55.19. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Encompass Health share holders is that insiders were buying at near the current price.

While Encompass Health insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
insider-trading-volume

Encompass Health is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Encompass Health Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Encompass Health. We can see that Independent Director Gregory Carmichael paid US$100k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.

Insider Ownership Of Encompass Health

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. Encompass Health insiders own 2.0% of the company, currently worth about US$110m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Encompass Health Tell Us?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Encompass Health. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Encompass Health.

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.

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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