Cavco Industries, Inc.'s (NASDAQ:CVCO) stock rose 11% last week, but insiders who sold US$819k worth of stock over the last year are probably in a more advantageous position. Selling at an average price of US$293, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Cavco Industries
Over the last year, we can see that the biggest insider sale was by the Senior Vice President of Corporate Development, Steven Like, for US$819k worth of shares, at about US$293 per share. That means that an insider was selling shares at around the current price of US$291. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). Steven Like was the only individual insider to sell 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Cavco Industries Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Cavco Industries. Specifically, Senior Vice President of Corporate Development Steven Like ditched US$819k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does Cavco Industries Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Cavco Industries insiders own about US$182m worth of shares (which is 6.8% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Cavco Industries Tell Us?
An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But since Cavco Industries is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cavco Industries. Be aware that Cavco Industries is showing 2 warning signs in our investment analysis, and 1 of those is a bit concerning...
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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