This Insider Has Just Sold Shares In Humana Inc. (NYSE:HUM)
CONTRIBUTOR
Simply Wall St Simply Wall St
PUBLISHED
SEP 24, 2022 09:12AM EDT
We wouldn't blame Humana Inc. (NYSE:HUM) shareholders if they were a little worried about the fact that Joseph Ventura, the Chief Legal Officer recently netted about US$621k selling shares at an average price of US$507. That sale reduced their total holding by 23% which is hardly insignificant, but far from the worst we've seen.
Humana Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the President, Bruce Broussard, sold US$4.0m worth of shares at a price of US$457 per share. That means that even when the share price was below the current price of US$487, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 13% of Bruce Broussard's holding.
Humana insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Does Humana Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Humana insiders own about US$133m worth of shares (which is 0.2% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Humana Insider Transactions Indicate?
An insider sold Humana shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Humana is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company.