In recent trading activity, an insider of Carvana Co. (NYSE:CVNA), a leading e-commerce platform for buying and selling used cars, has executed significant stock transactions. The insider, identified as Ernest C. Garcia II, reported selling a total of $8,263,249 worth of Class A Common Stock. These sales occurred in multiple transactions at prices that ranged from $82.0025 to $84.1879 per share.
The transactions were carried out in accordance with a pre-arranged trading plan, known as a Rule 10b5-1 plan, which was adopted by Garcia on March 11, 2024. Such plans allow company insiders to establish predetermined trading arrangements for selling stocks at a time when they are not in possession of material non-public information, providing an affirmative defense against accusations of insider trading.
The sales took place over two days, with Garcia disposing of shares on April 30 and May 1, 2024. The transactions on April 30 included sales at weighted average prices of $82.0025 and $82.7051, with the shares sold in multiple transactions at prices ranging from $81.42 to $83.27. On May 1, the sales continued with weighted average prices of $82.3881, $83.5366, and $84.1879, with prices ranging from $82.00 to $84.78.
Following these transactions, Garcia's direct ownership in Class A Common Stock has adjusted to 3,112,500 shares. Additionally, Garcia has indirect ownership through entities such as Verde Investments, Inc., Ernest Irrevocable 2004 Trust III, and Ernest C. Garcia III Multi-Generational Trust III, which hold significant amounts of both Class A and Class B Common Stock. Garcia is closely associated with these entities, either through direct control or as a non-voting co-trustee.
Investors and market watchers often pay close attention to insider trades as they can provide insights into an insider’s perspective on the value of the company’s stock. The transactions reported by Garcia are part of a regular disclosure required by the Securities and Exchange Commission for insiders of publicly traded companies.
Carvana Co. has not issued any public statement regarding these recent insider transactions at the time of reporting.
InvestingPro Insights
As Carvana Co. (NYSE:CVNA) navigates through its latest insider trading activity, real-time data and insights from InvestingPro offer a deeper understanding of the company's current financial health and market performance. With a market capitalization of $23.81 billion, Carvana's financial metrics and stock movements are under scrutiny by investors following the significant stock sales by insider Ernest C. Garcia II.
InvestingPro data shows that Carvana is currently trading at a P/E ratio of 20.39, suggesting that the stock is being valued by the market at a level that is consistent with the company's earnings. However, the adjusted P/E ratio for the last twelve months as of Q1 2024 stands at -23.5, reflecting expectations of negative earnings. This is complemented by a PEG ratio of 0.14, which indicates that the stock may be undervalued relative to its earnings growth.
One of the noteworthy InvestingPro Tips highlights that Carvana has experienced a significant return over the last week, with a price total return of 12.37%. This is part of a larger trend, as the company has also seen an impressive 1106.23% return over the past year. Additionally, Carvana is trading at a high Price / Book multiple of 61.61 as of the last twelve months ending Q1 2024, which may suggest a premium valuation relative to the company's book value.
For investors looking for more comprehensive analysis and additional insights, InvestingPro offers a range of tips on Carvana, including information on shareholder yield, near-term earnings growth, and stock volatility. In fact, there are 16 additional InvestingPro Tips available that can help investors make more informed decisions. To access these tips and more detailed analytics, visit InvestingPro's Carvana page and consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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