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carsales.com Ltd (ASX:CAR) insiders have a reason to boast after seeing a AU$916k addition to their AU$7.5m investment

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·3 min read
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Last week, carsales.com Ltd (ASX:CAR) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 7.7% last week, resulting in a AU$404m increase in the company's market worth. As a result, the stock they originally bought for AU$7.5m is now worth AU$8.4m.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for carsales.com

carsales.com Insider Transactions Over The Last Year

In fact, the recent purchase by Walter Pisciotta was the biggest purchase of carsales.com shares made by an insider individual in the last twelve months, according to our records. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$19.93. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid AU$7.5m for 420.02k shares. But they sold 60.00k shares for AU$1.5m. In the last twelve months there was more buying than selling by carsales.com insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
insider-trading-volume

carsales.com is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at carsales.com Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at carsales.com. In total, insiders bought AU$7.5m worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Insider Ownership of carsales.com

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. carsales.com insiders own 5.7% of the company, currently worth about AU$320m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At carsales.com Tell Us?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about carsales.com. Looks promising! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 1 warning sign for carsales.com you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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