Yahoo Finance As TrueCar, Inc. (NASDAQ:TRUE) gains 37%, insiders who bought last year may be wishing they had bet higher
Last week, TrueCar, Inc. (NASDAQ:TRUE) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 37% last week, resulting in a US$63m increase in the company's market worth. As a result, their original purchase of US$96k worth of stock is now worth US$106k.
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 TrueCar
TrueCar Insider Transactions Over The Last Year
In fact, the recent purchase by Christopher Claus was the biggest purchase of TrueCar shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of US$2.65. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for TrueCar share holders is that an insider was buying at near the current price. Christopher Claus was the only individual insider to buy shares in the last twelve months.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does TrueCar Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that TrueCar insiders own about US$6.7m worth of shares (which is 2.9% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At TrueCar Tell Us?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that TrueCar insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing TrueCar. For example, TrueCar has 2 warning signs (and 1 which is significant) we think you should know about.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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. 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.
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