U.S. markets closed
  • S&P Futures

    3,838.25
    +29.00 (+0.76%)
     
  • Dow Futures

    31,119.00
    +207.00 (+0.67%)
     
  • Nasdaq Futures

    13,031.00
    +120.00 (+0.93%)
     
  • Russell 2000 Futures

    2,231.60
    +32.40 (+1.47%)
     
  • Crude Oil

    62.59
    +1.09 (+1.77%)
     
  • Gold

    1,739.30
    +10.50 (+0.61%)
     
  • Silver

    26.83
    +0.39 (+1.46%)
     
  • EUR/USD

    1.2104
    +0.0016 (+0.13%)
     
  • 10-Yr Bond

    1.4600
    -0.0580 (-3.82%)
     
  • Vix

    27.95
    -0.94 (-3.25%)
     
  • GBP/USD

    1.3991
    +0.0069 (+0.49%)
     
  • USD/JPY

    106.3950
    -0.1070 (-0.10%)
     
  • BTC-USD

    46,478.70
    +991.99 (+2.18%)
     
  • CMC Crypto 200

    930.52
    -2.62 (-0.28%)
     
  • FTSE 100

    6,483.43
    -168.53 (-2.53%)
     
  • Nikkei 225

    29,572.71
    +606.70 (+2.09%)
     

Should You Take Comfort From Insider Transactions At AutoZone, Inc. (NYSE:AZO)?

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in AutoZone, Inc. (NYSE:AZO).

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

Check out our latest analysis for AutoZone

The Last 12 Months Of Insider Transactions At AutoZone

The Independent Director Michael Calbert made the biggest insider purchase in the last 12 months. That single transaction was for US$1.8m worth of shares at a price of US$900 each. Even though the purchase was made at a significantly lower price than the recent price (US$1,180), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, 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

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

AutoZone Insiders Are Selling The Stock

The last three months saw significant insider selling at AutoZone. In total, Chairman William Rhodes dumped US$119k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that AutoZone insiders own 0.3% of the company, worth about US$87m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The AutoZone Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. In contrast, they appear keener if you look at the last twelve months. We like that insiders own a fair amount of the company. So we're not overly bothered by recent selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing AutoZone. For example - AutoZone has 2 warning signs we think you should be aware of.

Of course AutoZone may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

This article by Simply Wall St is general in nature. 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.

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