We wouldn't blame Group 1 Automotive, Inc. (NYSE:GPI) shareholders if they were a little worried about the fact that Peter DeLongchamps, the Senior Vice President of Manufacturer Relations recently netted about US$892k selling shares at an average price of US$370. However, that sale only accounted for 7.7% of their holding, so arguably it doesn't say much about their conviction.
Group 1 Automotive Insider Transactions Over The Last Year
In fact, the recent sale by Peter DeLongchamps was the biggest sale of Group 1 Automotive shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of US$376, an insider wanted to cash in some shares. 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. 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. We note that the biggest single sale was only 7.7% of Peter DeLongchamps's holding.
In the last year Group 1 Automotive insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Insider Ownership Of Group 1 Automotive
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. Group 1 Automotive insiders own about US$112m worth of shares (which is 2.3% of the company). 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 Does This Data Suggest About Group 1 Automotive Insiders?
Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. 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. For example, Group 1 Automotive has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.
But note: Group 1 Automotive may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.
