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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
Tabula Rasa HealthCare Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Co-Founder Calvin Knowlton bought US$488k worth of shares at a price of US$65.77 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$41.42). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Calvin Knowlton was the only individual insider to buy shares in the last twelve months.
You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Tabula Rasa HealthCare is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Tabula Rasa HealthCare
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 11% of Tabula Rasa HealthCare shares, worth about US$97m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Tabula Rasa HealthCare Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Tabula Rasa HealthCare shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Tabula Rasa HealthCare and their transactions don't cause us concern. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Tabula Rasa HealthCare may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.