Mister Car Wash, Inc.'s (NYSE:MCW) stock dropped 4.9% this week, offering solace to those who sold earlier in the year

By
Simply Wall St
Published
January 11, 2022
NYSE:MCW
Source: Shutterstock

Mister Car Wash, Inc.'s (NYSE:MCW) stock price has dropped 4.9% in the previous week, but insiders who sold US$1.9m in stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of US$16.11 is still below the current share price.

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.

Check out our latest analysis for Mister Car Wash

The Last 12 Months Of Insider Transactions At Mister Car Wash

In the last twelve months, the biggest single sale by an insider was when the Senior Vice President of Operations, Joseph Matheny, sold US$1.4m worth of shares at a price of US$15.00 per share. That means that even when the share price was below the current price of US$17.96, 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 33% of Joseph Matheny's stake. Joseph Matheny was the only individual insider to sell shares in the last twelve months.

Joseph Matheny divested 120.00k shares over the last 12 months at an average price of US$16.11. 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!

insider-trading-volume
NYSE:MCW Insider Trading Volume January 11th 2022

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Mister Car Wash

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Mister Car Wash insiders own 1.7% of the company, worth about US$92m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Mister Car Wash Tell Us?

It doesn't really mean much that no insider has traded Mister Car Wash shares in the last quarter. We don't take much encouragement from the transactions by Mister Car Wash insiders. But we do like the fact that insiders own a fair chunk of the company. 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. In terms of investment risks, we've identified 1 warning sign with Mister Car Wash and understanding this should be part of your investment process.

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, but not derivative transactions.

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