UnitedHealth Group Insiders Sell US$6.6m Of Stock, Possibly Signalling Caution

Many UnitedHealth Group Incorporated (NYSE:UNH) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for UnitedHealth Group

The Last 12 Months Of Insider Transactions At UnitedHealth Group

The CEO & Non-Independent Director, Andrew Witty, made the biggest insider sale in the last 12 months. That single transaction was for US$3.0m worth of shares at a price of US$487 each. That means that an insider was selling shares at slightly below the current price (US$504). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 6.6% of Andrew Witty's holding.

UnitedHealth Group insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insiders At UnitedHealth Group Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at UnitedHealth Group. In total, CEO & Non-Independent Director Andrew Witty sold US$2.0m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that UnitedHealth Group insiders own 0.3% of the company, worth about US$1.5b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The UnitedHealth Group Insider Transactions Indicate?

An insider hasn't bought UnitedHealth Group stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But it is good to see that UnitedHealth Group 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 while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - UnitedHealth Group has 1 warning sign we think you should be aware of.

But note: UnitedHealth Group 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 of direct interests only, but not derivative transactions or indirect interests.

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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.