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In the last year, multiple insiders have substantially increased their holdings of carsales.com Ltd (ASX:CAR) stock, indicating that insiders' optimism about the company's prospects has increased.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for carsales.com
The Last 12 Months Of Insider Transactions At carsales.com
The Co-Founder & Non Executive Director, Walter Pisciotta, made the biggest insider sale in the last 12 months. That single transaction was for AU$5.5m worth of shares at a price of AU$22.15 each. So we know that an insider sold shares at around the present share price of AU$20.59. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign. Notably Walter Pisciotta was also the biggest buyer, having purchased AU$8.5m worth of shares.
Happily, we note that in the last year insiders paid AU$8.5m for 467.27k shares. On the other hand they divested 330.00k shares, for AU$7.3m. In total, carsales.com insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
carsales.com is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does carsales.com Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that carsales.com insiders own 5.1% of the company, worth about AU$366m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The carsales.com Insider Transactions Indicate?
The fact that there have been no carsales.com insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like carsales.com insiders think the business has merit. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 2 warning signs for carsales.com and we suggest you have a look.