Insiders who bought Action Construction Equipment Limited (NSE:ACE) stock in the last 12 months were richly rewarded last week. The company's market value increased by ₹3.3b as a result of the stock's 13% gain over the same period. As a result, their original purchase of ₹21m worth of stock is now worth ₹68m.
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.
Action Construction Equipment Insider Transactions Over The Last Year
The Chairman & MD Vijay Agarwal made the biggest insider purchase in the last 12 months. That single transaction was for ₹6.9m worth of shares at a price of ₹67.30 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of ₹247. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Vijay Agarwal bought 276.26k shares over the last 12 months at an average price of ₹74.32. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Action Construction Equipment is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Action Construction Equipment Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Action Construction Equipment. In total, insiders dumped ₹6.0m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Insider Ownership of Action Construction Equipment
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Action Construction Equipment insiders own 76% of the company, currently worth about ₹21b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Action Construction Equipment Insiders?
Insiders haven't bought Action Construction Equipment stock in the last three months, but there was some selling. But we take heart from prior transactions. On top of that, insiders own a significant portion of the company. So we're not too bothered by recent selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Action Construction Equipment. Every company has risks, and we've spotted 2 warning signs for Action Construction Equipment you should know about.
Of course Action Construction Equipment 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.
If you’re looking to trade Action Construction Equipment, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.