Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Evolent Health, Inc. (NYSE:EVH), that sends out a positive message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

The Last 12 Months Of Insider Transactions At Evolent Health

The Co-Founder Seth Blackley made the biggest insider purchase in the last 12 months. That single transaction was for US$498k worth of shares at a price of US$9.01 each. We do like to see buying, but this purchase was made at well below the current price of US$11.18. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Evolent Health insiders may have bought shares in the last year, but they didn't sell any. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Evolent Health insiders own about US$22m worth of shares. That equates to 1.7% 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 Evolent Health Tell Us?

The fact that there have been no Evolent Health insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Evolent Health and their transactions don't cause us concern. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Evolent Health.

Of course Evolent Health may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.

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.