Shares of the technology-based healthcare services company ModivCare (NASDAQ:MODV) closed over 15% higher on September 14 following the announcement that the company’s top insider bought stock. Although a top insider buying stock is a positive development, investors should analyze stocks on many parameters before investing. Savvy investors can leverage TipRanks’ Experts Center tools to form investment strategies.
Returning to the insider trade, an SEC filing revealed that Coliseum Capital Management, which owns more than a 10% stake in the company, bought MODV shares worth $6.36 million. It is worth noting that Coliseum Capital Management acquired MODV stock worth $9.49 million earlier this month.
What stands out is that these transactions came after ModivCare stock lost a substantial amount of value on a year-to-date basis (despite yesterday’s gain, MODV stock is still down over 62% year-to-date). Further, these transactions came in the form of Informative Buy. Investors should note that informative trades have a higher predictive ability as they reflect the insiders’ sentiment on the stock.
Interestingly, TipRanks offers daily insider transactions and a list of the top corporate insiders. It also provides a list of hot stocks that boast either a Very Positive or Positive insider confidence signal.
As the Insider Confidence Signal for MODV is positive, let’s look at the recent insider trading activity.
Recent Insider Trades
TipRanks’ Insider Trading Activity tool shows that MODV stock has witnessed seven Informative Buy transactions from Coliseum Capital Management in the last six months. Further, Coliseum Capital Management placed Informative Buy trades for MODV shares worth $31.4 million in the last three months.
While Coliseum Capital Management is increasing its stake in the company, let’s look at what the Street recommends for the stock.
What is the Price Prediction for MODV Stock?
ModivCare stock has received four unanimous Buy recommendations, reflecting a Strong Buy consensus rating on TipRanks. Further, as its stock has lost substantial value, analysts’ average price target of $75.75 implies 124.38% upside potential from current levels.
Bottom Line
While the top insider and analysts remain bullish about MODV’s prospects, its low cash balance and high debt remain a concern. Thus, investors should take caution before going long on the stock.
