Yahoo Finance The Non-Independent Executive Chairman of Avis Budget Group, Inc. (NASDAQ:CAR), Bernardo Hees, Just Bought 11% More Shares
Avis Budget Group, Inc. (NASDAQ:CAR) shareholders (or potential shareholders) will be happy to see that the Non-Independent Executive Chairman, Bernardo Hees, recently bought a whopping US$5.0m worth of stock, at a price of US$79.39. Not only is that a big swing, but it increased their holding size by 11%, which is definitely great to see.
See our latest analysis for Avis Budget Group
The Last 12 Months Of Insider Transactions At Avis Budget Group
In fact, the recent purchase by Bernardo Hees was the biggest purchase of Avis Budget Group 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 around the current price of US$86.83. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.
Happily, we note that in the last year insiders paid US$6.6m for 96.74k shares. But they sold 8.30k shares for US$519k. In total, Avis Budget Group insiders bought more than they sold over the last year. They paid about US$68.72 on average. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Avis Budget Group insiders own 1.8% of the company, currently worth about US$108m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Avis Budget Group Insiders?
It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Avis Budget Group. Nice! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Avis Budget Group has 3 warning signs (and 1 which is a bit concerning) we think you should know about.
But note: Avis Budget Group 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, 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 (at) simplywallst.com.
