Trade Alert: The Co-Founder & Non Executive Director Of carsales.com Ltd (ASX:CAR), Walter Pisciotta, Has Just Spent AU$12m Buying 7.1% More Shares
Those following along with carsales.com Ltd (ASX:CAR) will no doubt be intrigued by the recent purchase of shares by Walter Pisciotta, Co-Founder & Non Executive Director of the company, who spent a stonking AU$12m on stock at an average price of AU$19.95. While that only increased their holding size by 7.1%, it is still a big swing by our standards.
Check out our latest analysis for carsales.com
carsales.com Insider Transactions Over The Last Year
Notably, that recent purchase by Walter Pisciotta is the biggest insider purchase of carsales.com shares that we've seen in the last year. That implies that an insider found the current price of AU$21.90 per share to be enticing. 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. In this case we're pleased to report that the insider purchases were made at close to current prices. Notably Walter Pisciotta was also the biggest seller.
Happily, we note that in the last year insiders paid AU$20m for 1.06m shares. But insiders sold 330.00k shares worth AU$7.3m. In total, carsales.com insiders bought more than they sold over the last year. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company 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 4.8% of the company, worth about AU$389m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The carsales.com Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest carsales.com insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing carsales.com. At Simply Wall St, we've found that carsales.com has 4 warning signs (2 are a bit unpleasant!) that deserve your attention before going any further with your analysis.
Of course carsales.com 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.
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