This Insider Has Just Sold Shares In Carvana

Some Carvana Co. (NYSE:CVNA) shareholders may be a little concerned to see that the Lead Independent Director, Michael Maroone, recently sold a substantial US$2.5m worth of stock at a price of US$273 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 4.6%.

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Carvana Insider Transactions Over The Last Year

The insider, Ernest Garcia, 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$120 each. That means that an insider was selling shares at slightly below the current price (US$293). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 13% of Ernest Garcia's holding.

In the last year Carvana insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Carvana insiders own 1.8% of the company, currently worth about US$1.1b based on the recent share price. 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 Does This Data Suggest About Carvana Insiders?

An insider hasn't bought Carvana stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. 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 Carvana has 4 warning signs (1 doesn't sit too well with us!) that deserve your attention before going any further with your analysis.

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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.