Insiders at Clover Health Investments, Corp. (NASDAQ:CLOV) sold their shares?
We wouldn’t blame Clover Health Investments, Corp. (NASDAQ:CLOV) shareholders if they were a bit worried that company insider Chamath Palihapitiya recently made about $20 million by selling shares at an average price of $1.77. This sale reduced their total stake by 37%, which is not negligible, but far from the worst we have seen.
Our analysis indicates that CLOV is potentially overvalued!
The last 12 months of insider trading at Clover Health Investments
In fact, the recent sale by Chamath Palihapitiya was the largest sale of Clover Health Investments shares by an insider in the last twelve months, according to our records. We usually don’t like insider selling, but the lower the selling price, the more we’re concerned about it. It is reassuring that this sale was made at a price well above the current share price of US$1.56. It is therefore difficult to draw a firm conclusion.
Fortunately, we note that last year insiders paid $11 million for 1.92 million shares. But they sold 11.01 million shares for $20 million. You can see a visual representation of insider trading (by companies and individuals) over the past 12 months, below. By clicking on the graph below, you will be able to see the precise detail of each insider trade!
If you like buying stocks that insiders are buying, rather than selling, then you might love this free list of companies. (Hint: insiders bought them).
Does Clover Health Investments boast high insider ownership?
I like to look at how many shares insiders own in a company, to help me get a sense of how aligned they are with insiders. We generally like to see fairly high levels of insider ownership. It’s great to see that Clover Health Investments insiders own 23% of the company, worth approximately $168 million. Most shareholders would be happy to see this type of insider ownership, as it suggests that management’s incentives are well aligned with those of other shareholders.
What could insider trading at Clover Health Investments tell us?
An insider recently sold shares of Clover Health Investments, but did not buy any. And our longer-term analysis of insider trading didn’t provide confidence either. The company enjoys strong insider ownership, but we are a little hesitant given the history of stock sales. So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. At Simply Wall St, we found 4 warning signs for Clover Health Investments that deserve your attention before buying shares.
Sure Clover Health Investments may not be the best stock to buy. So you might want to see this free set of high quality companies.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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