Stock Analysis
National Tyre & Wheel Limited (ASX:NTD) shareholders (or potential shareholders) will be happy to see that insider Ryan Young recently bought a whopping AU$2.7m worth of stock, at a price of AU$1.36. That purchase boosted their holding by 65%, which makes us wonder if the move was inspired by quietly confident deeply-felt optimism.
View our latest analysis for National Tyre & Wheel
In fact, the recent purchase by Ryan Young was the biggest purchase of National Tyre & Wheel shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of AU$0.54. 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. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Ryan Young was the only individual insider to buy during the last year.
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.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that National Tyre & Wheel insiders own 35% of the company, worth about AU$25m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in National Tyre & Wheel shares, given these transactions (along with notable insider ownership of the company). While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 3 warning signs for National Tyre & Wheel (of which 1 shouldn't be ignored!) 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, but not derivative transactions.
Find out whether National Tyre & Wheel is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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.
National Tyre & Wheel Limited, together with its subsidiaries, engages in the marketing and distribution of motor vehicle tires, wheels, tubes, and related products in Australia, New Zealand, and South Africa.
Moderate growth potential and slightly overvalued.
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