A number of insiders bought Turners Automotive Group Limited (NZSE:TRA) stock last year, which is great news for shareholders
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Turners Automotive Group Limited (NZSE:TRA), it sends a favourable message to the company's shareholders.
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.
See our latest analysis for Turners Automotive Group
Turners Automotive Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director John Roberts for NZ$100k worth of shares, at about NZ$3.58 per share. That means that even when the share price was higher than NZ$3.33 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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.
In the last twelve months Turners Automotive Group 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!
Turners Automotive Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders At Turners Automotive Group Have Bought Stock Recently
It's good to see that Turners Automotive Group insiders have made notable investments in the company's shares. Independent Non-Executive Director John Roberts spent NZ$100k on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Does Turners Automotive Group Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Turners Automotive Group insiders own about NZ$50m worth of shares. That equates to 17% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Turners Automotive Group Insider Transactions Indicate?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Turners Automotive Group we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 2 warning signs for Turners Automotive Group (1 is potentially serious!) and we strongly recommend you look at these before investing.
But note: Turners Automotive Group 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.
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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.
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