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Insiders of Construction Partners, Inc. (NASDAQ:ROAD) received good value on their investment after their US$628k purchase jumped US$75k in value

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Last week, Construction Partners, Inc. (NASDAQ:ROAD) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 7.8% last week, resulting in a US$89m increase in the company's market worth. As a result, the stock they originally bought for US$628k is now worth US$704k.

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.

View our latest analysis for Construction Partners

Construction Partners Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Senior Vice President John Harper for US$628k worth of shares, at about US$21.05 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$23.45. 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.

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.

Insider Ownership of Construction Partners

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Construction Partners insiders own about US$135m worth of shares (which is 11% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Construction Partners Tell Us?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Construction Partners. One for the watchlist, at least! 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. To help with this, we've discovered 2 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in Construction Partners.

Of course Construction Partners may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.