Don't Ignore The Insider Selling In Copart

Copart, Inc. -0.60%

Copart, Inc.

CPRT

52.88

-0.60%

We wouldn't blame Copart, Inc. (NASDAQ:CPRT) shareholders if they were a little worried about the fact that A. Adair, the Executive Chairman recently netted about US$35m selling shares at an average price of US$57.77. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 2.0%.

Check out our latest analysis for Copart

The Last 12 Months Of Insider Transactions At Copart

Notably, that recent sale by A. Adair is the biggest insider sale of Copart shares that we've seen in the last year. So we know that an insider sold shares at around the present share price of US$57.25. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Copart 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!

insider-trading-volume
NasdaqGS:CPRT Insider Trading Volume April 3rd 2024

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

Insider Ownership Of Copart

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Copart insiders own about US$4.9b worth of shares (which is 8.8% of the company). 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 Copart Insider Transactions Indicate?

An insider sold Copart shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Copart is growing earnings. 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. Case in point: We've spotted 1 warning sign for Copart you should be aware of.

Of course Copart 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 of direct interests only, but not derivative transactions or indirect interests.

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