Yahoo Finance Should You Take Comfort From Insider Transactions At Avis Budget Group, Inc. (NASDAQ:CAR)?
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Avis Budget Group, Inc. (NASDAQ:CAR).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.
View our latest analysis for Avis Budget Group
Avis Budget Group Insider Transactions Over The Last Year
Independent Chairman of the Board Bernardo Hees made the biggest insider purchase in the last 12 months. That single transaction was for US$15m worth of shares at a price of US$34.87 each. Even though the purchase was made at a significantly lower price than the recent price (US$50.34), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
You can see the insider transactions (by 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!
Avis Budget Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Avis Budget Group
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Avis Budget Group insiders own 1.5% of the company, worth about US$54m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Avis Budget Group Insiders?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Avis Budget Group we think they are probably pretty confident of a bright future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Avis Budget Group 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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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