TrueCar Insiders Forfeit On 15% Gains After Selling Stock

Even though TrueCar, Inc. (NASDAQ:TRUE) stock gained 15% last week, insiders who sold US$56k worth of stock over the past year are probably better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of US$2.82, which is higher than the current price, may have been the best decision.

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.

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The Last 12 Months Of Insider Transactions At TrueCar

In the last twelve months, the biggest single sale by an insider was when the Executive VP, Jeffrey Swart, sold US$56k worth of shares at a price of US$2.82 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$1.61. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Jeffrey Swart.

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!

View our latest analysis for TrueCar

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Does TrueCar 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, TrueCar insiders have about 3.3% of the stock, worth approximately US$4.6m. We prefer to see high levels of insider ownership.

So What Do The TrueCar Insider Transactions Indicate?

It doesn't really mean much that no insider has traded TrueCar shares in the last quarter. We don't take much encouragement from the transactions by TrueCar insiders. And we're not picking up on high enough insider ownership to give us any comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for TrueCar you should know about.

But note: TrueCar 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.