Some Corpay, Inc. (NYSE:CPAY) shareholders may be a little concerned to see that the Independent Director, Joseph Farrelly, recently sold a substantial US$1.1m worth of stock at a price of US$375 per share. That sale reduced their total holding by 22% which is hardly insignificant, but far from the worst we've seen.

The Last 12 Months Of Insider Transactions At Corpay

In the last twelve months, the biggest single sale by an insider was when the Chairman, Ronald Clarke, sold US$50m worth of shares at a price of US$310 per share. That means that an insider was selling shares at slightly below the current price (US$363). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. 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 7.3% of Ronald Clarke's holding.

In the last year Corpay insiders didn't buy any company stock. 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!

I will like Corpay better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of Corpay

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Corpay insiders own 3.1% of the company, worth about US$812m. 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 Does This Data Suggest About Corpay Insiders?

Insiders sold Corpay shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. On the plus side, Corpay makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 2 warning signs with Corpay and understanding these should be part of your investment process.

But note: Corpay may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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 of direct interests only, but not derivative transactions or indirect interests.

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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.