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Trade Alert: The Non-Executive Director Of Eagers Automotive Limited (ASX:APE), Michelle Prater, Has Just Spent AU$2.8m Buying 24% More Shares

Eagers Automotive Limited (ASX:APE) shareholders (or potential shareholders) will be happy to see that the Non-Executive Director, Michelle Prater, recently bought a whopping AU$2.8m worth of stock, at a price of AU$11.42. Not only is that a big swing, but it increased their holding size by 24%, which is definitely great to see.

See our latest analysis for Eagers Automotive

Eagers Automotive Insider Transactions Over The Last Year

Notably, that recent purchase by Michelle Prater is the biggest insider purchase of Eagers Automotive shares that we've seen in the last year. That means that even when the share price was higher than AU$10.79 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

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In the last twelve months Eagers Automotive insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Does Eagers Automotive Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Eagers Automotive insiders own 9.9% of the company, worth about AU$282m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Eagers Automotive Insider Transactions Indicate?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. 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. That's what I like to see! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Our analysis shows 3 warning signs for Eagers Automotive (1 is potentially serious!) and we strongly recommend you look at them before investing.

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, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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