Multiple insiders secured a larger position in carsales.com Ltd (ASX:CAR) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for carsales.com

carsales.com Insider Transactions Over The Last Year

The Co-Founder & Non Executive Director Walter Pisciotta made the biggest insider purchase in the last 12 months. That single transaction was for AU$12m worth of shares at a price of AU$19.95 each. We do like to see buying, but this purchase was made at well below the current price of AU$28.59. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Happily, we note that in the last year insiders paid AU$12m for 622.24k shares. On the other hand they divested 67.90k shares, for AU$1.6m. In total, carsales.com insiders bought more than they sold over the last year. 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! insider-trading-volume

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this freelist of growing companies that insiders are buying.

Insider Ownership Of carsales.com

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. carsales.com insiders own about AU$438m worth of shares (which is 4.1% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.



What Might The Insider Transactions At carsales.com Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, carsales.com insiders feel good about the company's 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 instance, we've identified 3 warning signs for carsales.com (1 can't be ignored) you should be aware of.

Of course carsales.com may not be the best stock to buy. So you may wish to see this freecollection 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 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.