Quite a few insiders invested in Cigna Corporation (NYSE:CI) last year which is positive news for shareholders
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Cigna Corporation's (NYSE:CI) instance, it's good news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Cigna
Cigna Insider Transactions Over The Last Year
The Independent Director Donna Zarcone made the biggest insider purchase in the last 12 months. That single transaction was for US$211k worth of shares at a price of US$212 each. That implies that an insider found the current price of US$216 per share to be enticing. 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 Cigna share holders is that insiders were buying at near the current price.
Cigna insiders may have bought shares in the last year, but they didn't sell any. They paid about US$190 on average. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!
Cigna is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Cigna Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Cigna. We can see that Independent Director Donna Zarcone paid US$211k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.
Does Cigna 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Cigna insiders own 0.3% of the company, worth about US$258m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Cigna Insiders?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Cigna insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. When we did our research, we found 2 warning signs for Cigna (1 can't be ignored!) that we believe deserve your full attention.
But note: Cigna 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, but not derivative transactions.
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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