Some CorVel Corporation (NASDAQ:CRVL) shareholders may be a little concerned to see that the Executive Chairman, Victor Clemons, recently sold a substantial US$554k worth of stock at a price of US$277 per share. However, that sale only accounted for 0.2% of their holding, so arguably it doesn't say much about their conviction.

CorVel Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Director, Steven Hamerslag, for US$1.8m worth of shares, at about US$227 per share. That means that even when the share price was below the current price of US$240, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 6.7% of Steven Hamerslag's holding.

Insiders in CorVel didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like CorVel better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does CorVel Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. CorVel insiders own about US$399m worth of shares (which is 9.7% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About CorVel Insiders?

An insider hasn't bought CorVel 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. On the plus side, CorVel makes money, and is growing profits. 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing CorVel. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of CorVel.

But note: CorVel 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.