How Many Insiders Sold Cardinal Health, Inc. (NYSE:CAH) Shares?
We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Cardinal Health, Inc. (NYSE:CAH).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
View our latest analysis for Cardinal Health
The Last 12 Months Of Insider Transactions At Cardinal Health
Patricia Morrison made the biggest insider sale in the last 12 months. That single transaction was for US$1.9m worth of shares at a price of US$66.30 each. That is hardly a positive sign, even though it took place above the latest price (US$44.92). So it may not shed much light on insider confidence at current levels.
In the last twelve months insiders netted US$2.6m for 40.22k shares sold. In total, Cardinal Health insiders sold more than they bought over the last year. They sold for an average price of about US$65.55. We are not joyful about insider selling. But we note that the selling, on average, was at well above the recently traded price of US$44.92. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Cardinal Health Have Sold Stock Recently
The last three months saw some Cardinal Health insider selling. Senior VP & Chief Accounting Officer Stuart Laws only netted US$45k selling shares, in that period. Neither the lack of buying nor the presence of selling is heartening. But the selling simply isn’t sufficiently substantial to be of much use as a signal.
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. We usually like to see fairly high levels of insider ownership. It appears that Cardinal Health insiders own 0.3% of the company, worth about US$42m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Cardinal Health Tell Us?
We note a that there’s been a little more insider selling than buying, recently. But the difference isn’t enough to have us worried. Recent insider selling makes us a little nervous, in light of the broader picture of Cardinal Health insider transactions. But we do like the fact that insiders own a fair chunk of the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Cardinal Health.
But note: Cardinal 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
