Insiders who bought Community Health Systems, Inc. (NYSE:CYH) stock lover the last 12 months are probably not as affected by last week's 11% loss. After taking the recent loss into consideration, the US$2.11m worth of stock they bought is now worth US$3.15m, indicating that their investment yielded a positive return.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At Community Health Systems

The Non-Executive Chairman Wayne Smith made the biggest insider purchase in the last 12 months. That single transaction was for US$2.1m worth of shares at a price of US$2.11 each. We do like to see buying, but this purchase was made at well below the current price of US$3.15. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Community Health Systems is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership Of Community Health Systems

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 9.0% of Community Health Systems shares, worth about US$41m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Community Health Systems Tell Us?

It doesn't really mean much that no insider has traded Community Health Systems shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Community Health Systems and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Community Health Systems. To that end, you should learn about the 2 warning signs we've spotted with Community Health Systems (including 1 which is a bit concerning).

But note: Community Health Systems 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.

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