Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Bright Health Group, Inc. (NYSE:BHG), that sends out a positive message to the company’s 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 Bright Health Group
The Last 12 Months Of Insider Transactions At Bright Health Group
Over the last year, we can see that the biggest insider purchase was by Independent Lead Director Manuel Kadre for US$419k worth of shares, at about US$2.10 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$0.83). 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. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Bright Health Group insiders bought shares during the last year, they didn’t sell. They paid about US$0.99 on average. This is nice to see since it implies that insiders might see value around 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders At Bright Health Group Have Bought Stock Recently
It’s good to see that Bright Health Group insiders have made notable investments in the company’s shares. Not only was there no selling that we can see, but they collectively bought US$368k worth of shares. This is a positive in our book as it implies some confidence.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Bright Health Group insiders own about US$27m worth of shares. That equates to 5.2% of the company. 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 Does This Data Suggest About Bright Health Group Insiders?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But we don’t feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Bright Health Group we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. At Simply Wall St, we’ve found that Bright Health Group has 2 warning signs (1 is concerning!) 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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