ACV Auctions Insiders Sell US$9.6m Of Stock, Possibly Signalling Caution

The fact that multiple ACV Auctions Inc. (NASDAQ:ACVA) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for ACV Auctions

The Last 12 Months Of Insider Transactions At ACV Auctions

Over the last year, we can see that the biggest insider sale was by the Independent Director, Brian Hirsch, for US$3.0m worth of shares, at about US$20.69 per share. That means that even when the share price was below the current price of US$21.89, 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. It is worth noting that this sale was 94% of Brian Hirsch's holding.

Insiders in ACV Auctions didn't buy any shares in 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 ACV Auctions 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.

Insiders At ACV Auctions Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at ACV Auctions. In total, Independent Director Brian Hirsch sold US$3.0m 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.

Does ACV Auctions 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. We usually like to see fairly high levels of insider ownership. Insiders own 1.4% of ACV Auctions shares, worth about US$50m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The ACV Auctions Insider Transactions Indicate?

An insider sold ACV Auctions shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ACV Auctions. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of ACV Auctions.

But note: ACV Auctions 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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