Insiders Are Buying Healthways

| About: Tivity Health, (TVTY)
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In this article, I will feature one healthcare company that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.
  2. The stock is sold by no insiders in the month of intensive purchasing.
  3. At least two purchasers increase their holdings by more than 10%.

Healthways (HWAY) provides specialized solutions to assist people to maintain and enhance their physical, emotional, and social well-being.

Insider buying during the last 30 days

Here is a table of Healthways' insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Purchased Current Ownership Increase In Shares
Alison Taunton-Rigby Director Nov 7 4,100 22,155 shares +22.7%
Donato Tramuto Director Nov 7 4,200 4,200 shares from 0 to 4,200
Alfred Lumsdaine CFO Oct 29 5,000 22,821 shares +28.1%

There have been 13,300 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Healthways' insider-trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
November 2013 8,300 0
October 2013 5,000 0
September 2013 0 0

There have been 13,300 shares purchased and there have been zero shares sold by insiders since September 2013. The month of November has seen the most insider buying.

Financials

Healthways reported the third-quarter financial results on October 24 with the following highlights:

Revenue $166.6 million
Net income $1.8 million
Cash $2.8 million
Debt $260.7 million

Outlook

Healthways' guidance is as follows:

Q4/2013 FY/2013 FY/2014
Revenue $171-$181 million $665-$675 million $725-$760 million
EPS $0.00-$0.06 -$0.10 to -$0.04 N/A

Competition

Healthways' competitors include Cigna (NYSE:CI), Cardinal Health (NYSE:CAH), and McKesson (NYSE:MCK). Here is a table comparing these companies.

Company HWAY CI CAH MCK Industry Average (Specialized Health Services)
Market Cap: 437.10M 22.42B 21.42B 36.27B 621.58M
Employees: 2,400 35,800 33,600 43,500 1.70K
Qtrly Rev Growth (yoy): 0.00 0.10 -0.05 0.11 0.08
Revenue: 669.23M 31.85B 99.73B 127.16B 1.01B
Gross Margin: 0.19 0.35 0.05 0.05 0.29
EBITDA: 39.69M 3.73B 2.51B 3.22B 73.90M
Operating Margin: 0.02 0.11 0.02 0.02 0.07
Net Income: -2.65M 1.52B 403.00M 1.40B N/A
EPS: -0.08 5.30 1.17 5.88 0.66
P/E: N/A 15.30 53.98 26.84 20.50
PEG (5 yr expected): -5.99 1.08 1.71 1.41 1.54
P/S: 0.64 0.70 0.21 0.29 0.62

Healthways is trading above the industry-average P/S ratio.

Here is a table of these competitors' insider-trading activities this year.

Company Insider buying / shares Insider selling / shares
CI 4,200 403,966
CAH 435 1,271,828
MCK 0 1,758,848

Only Healthways has seen intensive insider buying during the last 30 days.

Conclusion

There have been three different insiders buying Healthways and there have not been any insiders selling Healthways during the last 30 days. All three of these insiders increased their holdings by more than 10%. Healthways has an insider ownership of 1.70%.

There are four analyst buy ratings, three neutral ratings, and three sell ratings with an average price target of $13.86. Healthways is trading at a forward P/E ratio of 38.64 and the company has a book value of $8.86 per share.

Healthways reported the third-quarter financial results on October 24, and the stock plunged after the report. The insiders started buying shares after the plunge. I believe the stock could be a good pick around $10 based on the intensive insider buying.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in HWAY over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.