Some Group 1 Automotive, Inc. (New York Stock Exchange: GPI) shareholders might be a little concerned that CEO and chief executive Earl Hesterberg recently sold $5.2 million worth of stock at $174 per share. It’s a big divestment, and it reduced the size of their operation by 12%, which is remarkable but not too bad.
Our analysis indicates that The GPI is potentially undervalued!
Group 1 Automotive Insider Trading Over the Past Year
Director Lincoln da Cunha Pereira Filho made the biggest insider sale of the past 12 months. This single transaction was for $6.1 million worth of shares at a price of $207 each. While we generally don’t like to see insider selling, it’s more of a concern if the selling takes place at a lower price. The good news is that this major selloff took place well above the current price of US$178. So this may not tell us anything about what insiders think of the current stock price.
Last year, 1 Automotive Group insiders did not buy any shares of the company. You can see a visual representation of insider trading (by companies and individuals) over the past 12 months, below. If you click on the chart, you can see all individual trades including stock price, individual and date!
For those who like to find winning investments this free list of growing companies with recent insider buying, might be just the ticket.
Insider ownership
Examining the total insider holdings in a company can help you know if they are well aligned with common shareholders. I think it’s a good sign if insiders have a significant number of shares in the company. Group 1 Automotive insiders own approximately $128 million in stock (or 5.1% of the company). I like to see this level of insider ownership because it increases the chances that management is thinking about the best interests of shareholders.
So what does this data suggest about Group 1 auto insiders?
An insider hasn’t bought shares of Group 1 Automotive in the past three months, but there have been some sales. And even if we look at last year, we haven’t seen any purchases. But since Group 1 Automotive is profitable and growing, that doesn’t worry us too much. Although insiders hold a lot of stock in the company (which is good), our analysis of their dealings does not give us confidence in the company. While we like to know what’s going on with insider ownership and trading, we also make sure to consider the risks a stock faces before making any investment decisions. For example, Group 1 Automotive has 3 warning signs (and 1 which is a little unpleasant) we think you should know.
Sure, you might find a fantastic investment by looking elsewhere. So take a look at this free list of interesting companies.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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Find out if Group 1 Automotive is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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