Some Credit Acceptance Corporation (NASDAQ:CACC) shareholders may be a little concerned to see that insider Donald Foss recently sold a whopping US$8.2m worth of stock at a price of US$410 per share. However, it’s crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 0.5%.
The Last 12 Months Of Insider Transactions At Credit Acceptance
Notably, that recent sale by Donald Foss is the biggest insider sale of Credit Acceptance shares that we’ve seen in the last year. That means that even when the share price was below the current price of US$430, an insider wanted to cash in some shares. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don’t know for sure what they think of the stock price. This single sale was just 0.5% of Donald Foss’s stake.
All up, insiders sold more shares in Credit Acceptance than they bought, over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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.
Does Credit Acceptance Boast High Insider Ownership?
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Credit Acceptance insiders own 32% of the company, currently worth about US$2.5b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Credit Acceptance Insiders?
The insider sales have outweighed the insider buying, at Credit Acceptance, in the last three months. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. On the plus side, Credit Acceptance makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Credit Acceptance. To assist with this, we’ve discovered 1 warning sign that you should run your eye over to get a better picture of Credit Acceptance.
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, but not derivative transactions.
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