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True Car Sees Strong Insider Buying

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True Car Sees Strong Insider Buying

If you have ever gone to a car dealer you know the issues in purchasing a new vehicle and the difficulty in comparing apples to apples as you attempt to find the best deal. One of the best ways to avoid this scenario to use TrueCar (NASDAQ:TRUE) , which removes the bartering from the dealers playbook. TrueCar, Inc. operates as an Internet-based information, technology, and communication services company. The company operates data-driven online platform through its TrueCar.com Website.

The goal of the company is providing price transparency to consumers is a welcome relief for car shoppers and it looks like they have managed to sign up a large number of dealers despite early resistance from dealers.

Recent insider purchases should give investors’ confidence. CEO & Chairman of the Board Scott Painter acquired 166,600 shares of this online car shopping company, paying $9.00 per share for a total amount of $1.49 million. Mr. Painter increased his stake by 11.12% to 1,664,176 shares with this purchase.

While the company is unprofitable, revenues were up 75% last quarter and the business model appears to be scalable. Market response to the IPO has been lack luster with the company dropping its offering price to $9 from an earlier range of $12 to $14 per share. A nearly 12% first day pop in the price to $10.02 has since faded and the stock is close to its IPO price again.

Although the stock is a recent IPO, strong buying from insiders usually is a strong sign. Generally after an IPO investors would expect the CEO to sell shares, but this purchase transaction is a good sign that the Chief Executive believes in the price action.

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