Have Credit Acceptance Corporation (NASDAQ:CACC) Insiders Been Selling Their Stock?

We wouldn't blame Credit Acceptance Corporation (NASDAQ:CACC) shareholders if they were a little worried about the fact that Kenneth Booth, the Chief Financial Officer recently netted about US$1.1m selling shares at an average price of US$425. That's a big disposal, and it decreased their holding size by 13%, which is notable but not too bad.

Check out our latest analysis for Credit Acceptance

Credit Acceptance Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Donald Foss, for US$13m worth of shares, at about US$485 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place 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$385. So it may not tell us anything about how insiders feel about the current share price.

In total, Credit Acceptance insiders sold more than they bought over the last year. The average sell price was around US$365. It's not particularly great to see insiders were selling shares at below recent prices. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Credit Acceptance 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Credit Acceptance insiders own 31% of the company, worth about US$2.0b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Credit Acceptance Tell Us?

An insider sold Credit Acceptance shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Credit Acceptance has 1 warning sign and it would be unwise to ignore it.

But note: Credit Acceptance 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, but not derivative transactions.

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