Have Insiders Been Selling Credit Acceptance Corporation (NASDAQ:CACC) Shares This Year?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Credit Acceptance Corporation (NASDAQ:CACC).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See 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. The silver lining is that this sell-down took place above the latest price (US$346). So it may not shed much light on insider confidence at current levels.

Over the last year we saw more insider selling of Credit Acceptance shares, than buying. You can see the insider transactions (by companies and 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does Credit Acceptance 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. It's great to see that Credit Acceptance insiders own 30% of the company, worth about US$1.8b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Credit Acceptance Tell Us?

The fact that there have been no Credit Acceptance insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Credit Acceptance insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Credit Acceptance. In terms of investment risks, we've identified 1 warning sign with Credit Acceptance and understanding this should be part of your investment process.

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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