National Tyre & Wheel Insiders Land Bargain With Gains Of AU$738k

National Tyre & Wheel Limited (ASX:NTD) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 14% decline in the stock price. After accounting for the recent loss, the AU$5.26m worth of shares they purchased is now worth AU$6.00m, suggesting a good return on their investment.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for National Tyre & Wheel

The Last 12 Months Of Insider Transactions At National Tyre & Wheel

The insider Ryan Young made the biggest insider purchase in the last 12 months. That single transaction was for AU$2.7m worth of shares at a price of AU$1.40 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.77). 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months National Tyre & Wheel insiders were buying shares, but not selling. They paid about AU$0.67 on average. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

National Tyre & Wheel is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders At National Tyre & Wheel Have Bought Stock Recently

Over the last quarter, National Tyre & Wheel insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought AU$2.5m worth of shares. That shows some optimism about the company's future.

Does National Tyre & Wheel Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It's great to see that National Tyre & Wheel insiders own 41% of the company, worth about AU$41m. 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 National Tyre & Wheel Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about National Tyre & Wheel. Looks promising! 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. Every company has risks, and we've spotted 3 warning signs for National Tyre & Wheel (of which 1 is concerning!) you should know about.

But note: National Tyre & Wheel 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.