Trade Alert: Executive VP Of AutoNation C. Coleman Edmunds Has Sold Stock

We wouldn't blame AutoNation, Inc. (NYSE:AN) shareholders if they were a little worried about the fact that C. Coleman Edmunds, the Executive VP recently netted about US$2.3m selling shares at an average price of US$190. That's a big disposal, and it decreased their holding size by 38%, which is notable but not too bad.

Our free stock report includes 2 warning signs investors should be aware of before investing in AutoNation. Read for free now.

AutoNation Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Edward Lampert, for US$83m worth of shares, at about US$196 per share. That means that an insider was selling shares at around the current price of US$182. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. 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).

AutoNation insiders didn't buy any shares over 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!

See our latest analysis for AutoNation

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Does AutoNation Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. AutoNation insiders own about US$564m worth of shares (which is 8.0% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The AutoNation Insider Transactions Indicate?

An insider sold AutoNation shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. 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 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. Be aware that AutoNation is showing 2 warning signs in our investment analysis, and 1 of those can't be ignored...

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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.