More money in the bank for insiders who divested US$886k worth of America's Car-Mart, Inc. (NASDAQ:CRMT) shares last year

By
Simply Wall St
Published
February 18, 2022
NasdaqGS:CRMT
Source: Shutterstock

Last week, America's Car-Mart, Inc.'s (NASDAQ:CRMT) stock jumped 13%, but insiders who sold US$886k worth of stock in over the past year are likely to be in a better position. Selling at an average price of US$161, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for America's Car-Mart

America's Car-Mart Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chief Operating Officer, Leonard Walthall, for US$685k worth of shares, at about US$171 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$108. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Leonard Walthall.

Leonard Walthall sold a total of 5.50k shares over the year at an average price of US$161. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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NasdaqGS:CRMT Insider Trading Volume February 18th 2022

I will like America's Car-Mart 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 of America's Car-Mart

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 7.0% of America's Car-Mart shares, worth about US$49m. 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 America's Car-Mart Tell Us?

It doesn't really mean much that no insider has traded America's Car-Mart shares in the last quarter. Our analysis of America's Car-Mart insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing America's Car-Mart. For example - America's Car-Mart has 3 warning signs we think you should be aware of.

Of course America's Car-Mart may not be the best stock to buy. So you may wish to see this free collection of high quality 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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