Yahoo Finance O'Reilly Automotive Insiders Sell US$49m Of Stock, Possibly Signalling Caution
Many O'Reilly Automotive, Inc. (NASDAQ:ORLY) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for O'Reilly Automotive
The Last 12 Months Of Insider Transactions At O'Reilly Automotive
Over the last year, we can see that the biggest insider sale was by the Vice Chairman, Lawrence O'Reilly, for US$11m worth of shares, at about US$1,053 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$1,081. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. 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 5.2% of Lawrence O'Reilly's stake.
Insiders in O'Reilly Automotive didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
O'Reilly Automotive Insiders Are Selling The Stock
The last three months saw significant insider selling at O'Reilly Automotive. In total, Vice Chairman Lawrence O'Reilly dumped US$5.7m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership Of O'Reilly Automotive
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It's great to see that O'Reilly Automotive insiders own 0.9% of the company, worth about US$566m. 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?
An insider hasn't bought O'Reilly Automotive stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, O'Reilly Automotive makes money, and is growing profits. 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. Case in point: We've spotted 3 warning signs for O'Reilly Automotive you should be aware of, and 1 of them is concerning.
Of course O'Reilly Automotive 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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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
