Anyone interested in Cars.com Inc. (NYSE:CARS) should probably be aware that the CEO & Director, T. Vetter, recently divested US$336k worth of shares in the company, at an average price of US$19.00 each. On the bright side, that sale was only 5.1% of their holding, so we doubt it's very meaningful, on its own.
The Last 12 Months Of Insider Transactions At Cars.com
In fact, the recent sale by CEO & Director T. Vetter was not their only sale of Cars.com shares this year. They previously made an even bigger sale of -US$1.5m worth of shares at a price of US$17.35 per share. That means that an insider was selling shares at slightly below the current price (US$18.21). 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. This single sale was just 23% of T. Vetter's stake.
Insiders in Cars.com didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Cars.com better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Cars.com insiders own about US$21m worth of shares. That equates to 1.8% 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 Cars.com Tell Us?
Insiders sold Cars.com shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since Cars.com is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we've found that Cars.com has 3 warning signs (2 are a bit unpleasant!) that deserve your attention before going any further with your analysis.
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.
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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.
