Carvana Co (NYSE: CVNA) is up roughly 18% on Wednesday after an SEC filing said insiders have been aggressively loading up on shares of the used car retailer in recent days.
Who’s been buying most recently?
Who topped the list was Ernst Garcia II – a major shareholder of the NYSE-listed company. He spent $42 million recently to pile up on shares of Carvana.
Others that participated in recent buying were Ryan Keeton (founder and chief brand officer), Paul Breaux (general counsel), and Dan Quayle (board member). Insider buying is a positive for the stock as it confirms that executives remain confident in the future of the company.
Over the past three months, insiders have bought more than $600 million worth of Carvana shares – a rather significant buying compared to its market capitalisation of $4.50 billion at present.
Carvana is committed to cutting costs
Carvana reported a wider-than-expected loss for its fiscal first quarter on lower demand and higher costs that saw it lay off 12% of its workforce (2,500 employees) in May.
The user car retailer also committed to lowering its SG&A costs and improving gross margin per unit in its new operating plan last month. Wall Street, on average, sees upside to $74 in shares of Carvana that translates to a 200% upside from here.
Amidst the pandemic, however, the stock had once traded at a high of $360.