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The fact that multiple O'Reilly Automotive, Inc. (NASDAQ:ORLY) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
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.
See our latest analysis for O'Reilly Automotive
The Last 12 Months Of Insider Transactions At O'Reilly Automotive
Over the last year, we can see that the biggest insider sale was by the Executive Vice Chairman, David O'Reilly, for US$26m worth of shares, at about US$1,126 per share. That means that even when the share price was below the current price of US$1,288, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 9.4% of David O'Reilly's holding.
In the last year O'Reilly Automotive insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Insiders At O'Reilly Automotive Have Sold Stock Recently
The last quarter saw substantial insider selling of O'Reilly Automotive shares. Specifically, insiders ditched US$1.7m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership Of O'Reilly Automotive
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. A high insider ownership often makes company leadership more mindful of shareholder interests. O'Reilly Automotive insiders own 0.8% of the company, currently worth about US$617m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.