A significant insider buy by Jeffrey R Balser, 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 Balser bought 2,375 shares of CVS Health, amounting to a total of $135,612.

CVS Health‘s shares are actively trading at $58.83, experiencing a down of 2.09% during Tuesday’s morning session.

Unveiling the Story Behind CVS Health

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.

Understanding the Numbers: CVS Health’s Finances

Revenue Growth: Over the 3 months period, CVS Health showcased positive performance, achieving a revenue growth rate of 6.31% as of 30 September, 2024. This reflects a substantial increase in the company’s top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Health Care sector.

Exploring Profitability:

• 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): CVS Health’s EPS reflects a decline, falling below the industry average with a current EPS of 0.07.

Debt Management: With a below-average debt-to-equity ratio of 1.1, CVS Health adopts a prudent financial strategy, indicating a balanced approach to debt management.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 15.25 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: The current P/S ratio of 0.21 is below industry norms, suggesting potential undervaluation and presenting an investment opportunity for those considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a lower-than-industry-average EV/EBITDA ratio of 10.47, CVS Health presents a potential value opportunity, as investors are paying less for each unit of EBITDA.

Market Capitalization Analysis: With a profound presence, the company’s market capitalization is above industry averages. This reflects substantial size and strong market recognition.

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Why Pay Attention to Insider Transactions

In the complex landscape of investment decisions, investors should approach insider transactions as part of a comprehensive analysis, considering various elements.

From a legal standpoint, the term “insider” pertains to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

A company insider’s new purchase is a indicator of their positive anticipation for a rise in the stock.

While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.

The Insider’s Guide to Important Transaction Codes

For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes 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.