Anyone interested in Cars.com Inc. (NYSE:CARS) should probably be aware that the CEO & Director, T. Vetter, recently divested US$267k worth of shares in the company, at an average price of US$19.00 each. However, the silver lining is that the sale only reduced their total holding by 3.7%, so we're hesitant to read anything much into it, on its own.
See our latest analysis for Cars.com
Cars.com Insider Transactions Over The Last Year
Notably, that recent sale by CEO & Director T. Vetter was not the only time they sold 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 even when the share price was below the current price of US$19.55, 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 23% of T. Vetter's stake.
Cars.com insiders didn't buy any shares 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 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.
Does Cars.com Boast High Insider Ownership?
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. Insiders own 2.0% of Cars.com shares, worth about US$25m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Cars.com Insider Transactions Indicate?
Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. But since Cars.com is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. 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.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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