Have O'Reilly Automotive, Inc. (NASDAQ:ORLY) Insiders Been Selling Their Stock?

By
Simply Wall St
Published
May 09, 2021
NasdaqGS:ORLY

Some O'Reilly Automotive, Inc. (NASDAQ:ORLY) shareholders may be a little concerned to see that the Executive Chairman, David O'Reilly, recently sold a substantial US$31m worth of stock at a price of US$559 per share. That sale reduced their total holding by 11% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for O'Reilly Automotive

O'Reilly Automotive Insider Transactions Over The Last Year

In fact, the recent sale by David O'Reilly was the biggest sale of O'Reilly Automotive shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$562. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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 11% of David O'Reilly's stake.

Insiders in O'Reilly Automotive didn't buy any shares in the last year. 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!

insider-trading-volume
NasdaqGS:ORLY Insider Trading Volume May 9th 2021

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

Does O'Reilly Automotive 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that O'Reilly Automotive insiders own 1.6% of the company, worth about US$636m. 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 Do The O'Reilly Automotive Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. But since O'Reilly Automotive is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we've found that O'Reilly Automotive has 3 warning signs (1 can't be ignored!) that deserve your attention before going any further with your analysis.

But note: O'Reilly Automotive 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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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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