Largest Insider Buys: Top 5 Stocks

1. CVS Health Corp (NYSE:CVS)

Number of Hedge Fund Investors: 67

CVS Health Corp (NYSE:CVS) saw important insider buying activity while its shares were tumbling to 52-week lows amid disappointing Q1 results. On May 1, CVS Health Corp (NYSE:CVS) said its adjusted EPS in the first quarter totaled $1.31 per share, missing estimates by $0.39. Revenue in the quarter jumped 3.7% year over year to $88.4 billion, missing estimates by $800 million.

Michael F. Mahoney, a director at CVS Health Corp (NYSE:CVS), snapped up 9,181 shares of CVS Health Corp (NYSE:CVS) at $54.49 per share on May 2. Since then the stock has lost about 0.73%.

In its fourth quarter 2023 investor letter, Vltava Fund stated the following regarding CVS Health Corporation (NYSE:CVS):

“Not every transaction creates value. Some transactions destroy company value. An example of such transaction is CVS Health Corporation (NYSE:CVS)’s acquisition of Oak Street Health in early 2023. This acquisition cost CVS $10.6 billion, and, based on metrics cited by the company itself, it seems to us that it was a waste of money for the most part. Unfortunately, CVS has its own history of overpriced acquisitions. The last one prior to that was in 2018, when CVS bought health insurer Aetna for $69 billion. We had assumed that CVS management, which has since changed, would recognise that mistake and learn from it. We were wrong. The acquisition of Oak Street Health is both disappointing and a warning to us. We now have a company in our portfolio whose capital allocation we consider to be poor and that should not be there. Unfortunately, the situation is complicated by the fact that the CVS stock is now very cheap and therefore we are reluctant to dispose of it just yet. We probably will do so, however, when the opportunity arises.”

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