Finance

Dissecting the Insider Trading Patterns of CVS Health Corporation (CVS)

Recent insider trends for CVS Health Corporation (NYSE:CVS) have caught the attention of investors. Patters in insider activity can help analysts formulate an outlook for a stock. In the case of CVS, the data has a lot to say about how the stock might perform going forward.

Institutions own 82.48% of CVS Health Corporation (CVS)’s shares. The total value of these holdings, in millions, is $64,703. Among active positions in the latest quarter, 654 holders increased their positions by a total of 49.63 million shares, 802 holders decreased the positions by a total of 46.37 million shares, and 142 holders held their positions. This works out to a net increase in ownership of 3.26 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 66 holders initiated new positions by a total of 8.16 million shares and 74 holders exited their positions by a total of 2.27 million shares. This nets out to an increase of 5.88 million shares and is a bullish sign for CVS.

In the last three months, insiders executed a total of 6 trades. 5 of these were buys and 1 were sells. Insider ownership decreased by a total of 19121 shares, which suggests that CVS’s key executives are feeling less optimistic about the outlook for the stock. The data from the past twelve months tells a similar story: insiders executed 34 buys and 48 sells, and ownership decreased by a net of 1.06 million shares.



Analysts often look at short interest, or the number of shares currently being shorted by investors, to aid in their outlook for a particular stock. CVS Health Corporation (NYSE:CVS)’s short interest is 32.96 million shares, or % of the float. This represents an increase of 6% in the number of shares being shorted compared to the previous reading, and implies that investors felt more pessimistic about the stock during the past two weeks.

In light of the insider ownership and trading data it makes sense to consider technicals to see if they come to a similar conclusion about the outlook for CVS. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that CVS is a Strong buy, which implies that CVS is expected to outperform the market based on prior trading patterns.

Conclusion




Institutional ownership trends suggest that the stock is cheap and the insider trading data indicates that insiders are bearish. Technical indicators (also) suggest that CVS Health Corporation (NYSE:CVS) is undervalued.

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