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Insider Buying: The Cars.com Inc. (NYSE:CARS) Co-Founder Just Bought 1.6% More Shares

Investors who take an interest in Cars.com Inc. (NYSE:CARS) should definitely note that the Co-Founder, T. Vetter, recently paid US$8.50 per share to buy US$102k worth of the stock. While that's a very decent purchase to our minds, it was proportionally a bit modest, boosting their holding by just 1.6%.

View our latest analysis for Cars.com

The Last 12 Months Of Insider Transactions At Cars.com

In fact, the recent purchase by T. Vetter was the biggest purchase of Cars.com shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of US$8.46. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

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While Cars.com insiders bought shares during the last year, they didn't sell. They paid about US$7.09 on average. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share price. 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!

insider-trading-volume
insider-trading-volume

Cars.com is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

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. From looking at our data, insiders own US$3.9m worth of Cars.com stock, about 0.7% of the company. I generally like to see higher levels of ownership.

So What Do The Cars.com Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Cars.com insiders are expecting a bright 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. You'd be interested to know, that we found 1 warning sign for Cars.com and we suggest you have a look.

Of course Cars.com 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.

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. 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.