Some of the losses seen by insiders who purchased UK£1.0m worth of Cazoo Group Ltd (NYSE:CZOO) shares over the past year were recovered after the stock increased by 108% over the past week. However, total losses seen by insiders are still UK£133k but in since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Cazoo Group
Over the last year, we can see that the biggest insider purchase was by Founder Alexander Chesterman for US$1.0m worth of shares, at about US$1.23 per share. That means that an insider was happy to buy shares at above the current price of US$1.05. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Alexander Chesterman was the only individual insider to buy during the last year.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Cazoo 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 Cazoo Group
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Cazoo Group insiders own 0.6% of the company, worth about US$4.4m. However, it's possible that insiders might have an indirect interest through a more complex structure. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Cazoo Group Tell Us?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Cazoo Group insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Cazoo Group has 2 warning signs we think you should be aware of.
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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