Copart Insider's Case Doesn't Convince

According to a Form 4 filed with the Securities and Exchange Commission, John Lindle, senior vice president of strategic growth at the auto auctioneer Copart (CPRT), directly purchased 4,500 shares of the stock on June 7 at an average price of $32.22 per share.

Studies show a small outperformance effect for stocks bought by insiders, and this makes sense, since insiders already have an economic connection to the company. Tying more of their wealth to the company, in addition to their income, should be avoided in favor of diversification unless the insider is particularly confident in the company's prospects. As a result, we believe it can be wise to review recent insider purchases to see if any interesting picks come up, similar to how many investors use stock screens....521 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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