Insider Activity Report: Humana (HUM)

Jorge Mesquita, a director at Humana (HUM), recently bought 545 shares. The buy increased his position by 27 percent, and came to a total cost of $200,066.

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  • This marks the first insider buy at the health insurer over the past two years. There have been several insider sales, including from the CEO and CFO, including some sales of as much as $8.9 million in shares. However, all sales over the past two years have occurred following the exercise of stock options.

    Overall, Humana insiders own 0.2 percent of shares.

    Shares have slid 28 percent over the past year. Rising healthcare and insurance costs in general have weighed on healthcare stocks.

    Humana has performed well, with revenues up 18 percent. However, they’ve also lost money in the most recent quarter. And shares are a bit pricey at 23 times forward earnings.

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  • Action to take: Humana shares have dropped lower in recent weeks, and may be forming a base with an eye towards a rally higher in the months ahead. Investors may like shares at current prices, where the stock also pays a 1 percent dividend.

    For traders, a potential move higher in the months ahead looks likely. The June $400 calls, last trading for about $12.10, could see mid-double-digit returns as a rebound scenario plays out.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.

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