Despite the fact that America's Car-Mart, Inc.'s (NASDAQ:CRMT) value has dropped 13% in the last week insiders who sold US$8.3m worth of stock in the past 12 months have had less success. Given that the average selling price of US$120 is still lower than the current share price, insiders would probably have been better off keeping their shares.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for America's Car-Mart
America's Car-Mart Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, Adam Peterson, for US$8.3m worth of shares, at about US$125 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$77.15. So it is hard to draw any strong conclusion from it. Adam Peterson was the only individual insider to sell shares in the last twelve months. Notably Adam Peterson was also the biggest buyer, having purchased US$5.2m worth of shares.
The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like America's Car-Mart better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders At America's Car-Mart Have Sold Stock Recently
The last quarter saw substantial insider selling of America's Car-Mart shares. In total, insider Adam Peterson sold US$8.3m 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
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. America's Car-Mart insiders own about US$38m worth of shares. That equates to 7.6% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At America's Car-Mart Tell Us?
An insider hasn't bought America's Car-Mart stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing America's Car-Mart. For instance, we've identified 3 warning signs for America's Car-Mart (1 is concerning) you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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.
