We wouldn't blame Credit Acceptance Corporation (NASDAQ:CACC) shareholders if they were a little worried about the fact that Arthur Smith, the Chief Analytics Officer recently netted about US$2.4m selling shares at an average price of US$422. Probably the most concerning element of the whole transaction is that the disposal amounted to 92% of their entire holding.
View our latest analysis for Credit Acceptance
The Last 12 Months Of Insider Transactions At Credit Acceptance
In fact, the recent sale by Arthur Smith was the biggest sale of Credit Acceptance shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of US$435, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. It is worth noting that this sale was 92% of Arthur Smith's holding.
In the last year Credit Acceptance insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership Of Credit Acceptance
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. Credit Acceptance insiders own 13% of the company, currently worth about US$697m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Credit Acceptance Tell Us?
Insiders haven't bought Credit Acceptance stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. 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. Every company has risks, and we've spotted 2 warning signs for Credit Acceptance you should know about.
Of course Credit Acceptance 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 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.
