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Possible Bearish Signals With UnitedHealth Group Insiders Disposing Stock

In the last year, many UnitedHealth Group Incorporated (NYSE:UNH) insiders sold a substantial stake in the company which may have sparked shareholders' attention. 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, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for UnitedHealth Group

UnitedHealth Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the CEO & Non-Independent Director, Andrew Witty, sold US$3.0m worth of shares at a price of US$487 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$548. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. This single sale was just 6.6% of Andrew Witty's stake.

Insiders in UnitedHealth Group didn't buy any shares in the last year. 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!

insider-trading-volume
insider-trading-volume

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).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. UnitedHealth Group insiders own about US$1.5b worth of shares (which is 0.3% of the company). 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?

The fact that there have been no UnitedHealth Group insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of UnitedHealth Group, we can't say the same about the selling of shares. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for UnitedHealth Group.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.