Landon Capital

In the last year, many Teladoc Health, Inc. (NYSE:TDOC) insiders sold a substantial stake in the company which may have sparked shareholders’ attention. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

The Last 12 Months Of Insider Transactions At Teladoc Health

The CEO & Director, Jason Gorevic, made the biggest insider sale in the last 12 months. That single transaction was for US$571k worth of shares at a price of US$25.91 each. That means that even when the share price was below the current price of US$28.26, an insider wanted to cash in some shares. 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. We note that the biggest single sale was only 3.5% of Jason Gorevic’s holding.

Teladoc Health insiders didn’t buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NYSE:TDOC Insider Trading Volume July 31st 2023

Insiders At Teladoc Health Have Sold Stock Recently

Over the last three months, we’ve seen a bit of insider selling at Teladoc Health. Chief People Officer Arnnon Geshuri divested only US$25k worth of shares in that time. It’s not great to see insider selling, nor the lack of recent buyers. But the amount sold isn’t enough for us to put any weight on it.

Insider Ownership Of Teladoc Health

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Teladoc Health insiders own about US$32m worth of shares. That equates to 0.7% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Teladoc Health Tell Us?

While there has not been any insider buying in the last three months, there has been selling. However, the sales are not big enough to concern us at all. Recent sales exacerbate our caution arising from analysis of Teladoc Health insider transactions. But we do like the fact that insiders own a fair chunk of 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. In terms of investment risks, we’ve identified 1 warning sign with Teladoc Health and understanding this should be part of your investment process.

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, but not derivative transactions.

Source: SimplyWall.St