Insiders of KAR Auction Services, Inc. (NYSE:KAR) are up 3.9% on their US$2.2m purchase after KAR Auction Services, Inc. (NYSE:KAR) rose 8.2% last week
KAR Auction Services, Inc. (NYSE:KAR) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 8.2% resulting in a US$113m addition to the company’s market value. As a result, the stock they originally bought for US$2.2m is now worth US$2.3m.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for KAR Auction Services
KAR Auction Services Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Executive Chairman of the Board James Hallett bought US$1.3m worth of shares at a price of US$13.15 per share. That means that an insider was happy to buy shares at around the current price of US$13.68. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the KAR Auction Services insiders decided to buy shares at close to current prices.
KAR Auction Services insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
KAR Auction Services 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 KAR Auction Services Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that KAR Auction Services insiders own 1.9% of the company, worth about US$28m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At KAR Auction Services Tell Us?
The fact that there have been no KAR Auction Services insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders own shares in KAR Auction Services and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that KAR Auction Services has 1 warning sign and it would be unwise to ignore it.
Of course KAR Auction Services 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.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here