We wouldn't blame Copart, Inc. (NASDAQ:CPRT) shareholders if they were a little worried about the fact that A. Adair, the Executive Chairman recently netted about US$32m selling shares at an average price of US$63.71. However, that sale only accounted for 2.0% of their holding, so arguably it doesn't say much about their conviction.

View our latest analysis for Copart

Copart Insider Transactions Over The Last Year

In fact, the recent sale by Executive Chairman A. Adair was not their only sale of Copart shares this year. Earlier in the year, they fetched US$57.77 per share in a -US$35m sale. That means that an insider was selling shares at slightly below the current price (US$62.97). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 2.0% of A. Adair's holding.

A. Adair ditched 1.10m shares over the year. The average price per share was US$60.47. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership

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. Copart insiders own about US$5.0b worth of shares (which is 8.3% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Copart 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 Copart is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Copart. At Simply Wall St, we found 1 warning sign for Copart that deserve your attention before buying any shares.

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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.