A significant insider buy by C. David Brown II, Director at CVS Health CVS, was executed on November 25, and reported in the recent SEC filing.

What Happened: In a Form 4 filing on Monday with the U.S. Securities and Exchange Commission, it was disclosed that II bought 2,331 shares of CVS Health, amounting to a total of $133,100.

The latest update on Tuesday morning shows CVS Health shares down by 2.09%, trading at $58.82.

Get to Know CVS Health Better

CVS Health offers a diverse set of healthcare services. Its roots are in its retail pharmacy operations, where it operates over 9,000 stores primarily in the us. CVS is also a large pharmacy benefit manager (acquired through Caremark), processing about 2 billion adjusted claims annually. It also operates a top-tier health insurer (acquired through Aetna) where it serves about 26 million medical members. The company’s recent acquisition of Oak Street adds primary care services to the mix, which could have significant synergies with all its existing business lines.

CVS Health’s Financial Performance

Revenue Growth: CVS Health’s remarkable performance in 3 months is evident. As of 30 September, 2024, the company achieved an impressive revenue growth rate of 6.31%. This signifies a substantial increase in the company’s top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Health Care sector.

Evaluating Earnings Performance:

• Gross Margin: The company shows a low gross margin of 13.16%, suggesting potential challenges in cost control and profitability compared to its peers.

• Earnings per Share (EPS): With an EPS below industry norms, CVS Health exhibits below-average bottom-line performance with a current EPS of 0.07.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 1.1.

Valuation Analysis:

• Price to Earnings (P/E) Ratio: CVS Health’s P/E ratio of 15.25 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: With a P/S ratio of 0.21 below industry standards, the stock shows potential undervaluation, making it an appealing investment option for those focusing on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a below-average EV/EBITDA ratio of 10.47, CVS Health presents an opportunity for value investors. This lower valuation may attract investors seeking undervalued opportunities.

Market Capitalization Analysis: With an elevated market capitalization, the company stands out above industry averages, showcasing substantial size and market acknowledgment.

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Unmasking the Significance of Insider Transactions

Insider transactions are not the sole determinant of investment choices, but they are a factor worth considering.

Within the legal framework, an “insider” is defined as any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities as per Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are mandated to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.

However, insider sells may not always signal a bearish view and can be influenced by various factors.

A Closer Look at Important Transaction Codes

Taking a closer look at transactions, investors often prioritize those unfolding in the open market, meticulously cataloged in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C denotes the conversion of an option, and transaction code A signifies a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of CVS Health’s Insider Trades.

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This article was generated by Benzinga’s automated content engine and reviewed by an editor.