Over the last year, a good number of insiders have significantly increased their holdings in Eagers Automotive Limited( ASX:APE ). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Eagers Automotive Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Marcus Birrell bought AU$3.9m worth of shares at a price of AU$21.00 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$26.87), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months insiders purchased 500.85k shares for AU$11m. But insiders sold 70.00k shares worth AU$1.1m. Overall, Eagers Automotive insiders were net buyers during the last year. 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!
Check out our latest analysis for Eagers Automotive
Eagers Automotive is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations,this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders At Eagers Automotive Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Eagers Automotive. In total, insiders bought AU$11m worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Does Eagers Automotive Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Eagers Automotive insiders own 3.6% of the company, currently worth about AU$273m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Eagers Automotive Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Eagers Automotive insiders are well aligned, and quite possibly think the share price is too low. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Eagers Automotive has 3 warning signs (and 1 which is significant) we think you should know about.
But note: Eagers Automotive may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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.
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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.
