Don't Ignore The Fact That This Insider Just Sold Some Shares In O'Reilly Automotive, Inc. (NASDAQ:ORLY)

By
Simply Wall St
Published
November 16, 2020
NasdaqGS:ORLY

Investors may wish to note that the Independent Director of O'Reilly Automotive, Inc., John Murphy, recently netted US$90k from selling stock, receiving an average price of US$452. However we note that the sale only shrunk their holding by 8.5%.

Check out our latest analysis for O'Reilly Automotive

The Last 12 Months Of Insider Transactions At O'Reilly Automotive

The Executive Chairman, David O'Reilly, made the biggest insider sale in the last 12 months. That single transaction was for US$14m worth of shares at a price of US$470 each. So we know that an insider sold shares at around the present share price of US$462. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Over the last year, we can see that insiders have bought 550.00 shares worth US$213k. On the other hand they divested 63.94k shares, for US$29m. All up, insiders sold more shares in O'Reilly Automotive than they bought, over the last year. 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!

insider-trading-volume
NasdaqGS:ORLY Insider Trading Volume November 16th 2020

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

Insider Ownership

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. O'Reilly Automotive insiders own 1.7% of the company, currently worth about US$558m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The O'Reilly Automotive Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, O'Reilly Automotive makes money, and is growing profits. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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 2 warning signs for O'Reilly Automotive you should know about.

Of course O'Reilly Automotive 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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This article by Simply Wall St is general in nature. 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.
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