Investors who take an interest in Eagers Automotive Limited (ASX:APE) should definitely note that the Non-Executive Director, Nicholas Politis, recently paid AU$9.93 per share to buy AU$496k worth of the stock. That's a very solid buy in our book, and increased their holding by a noteworthy 11%.

See our latest analysis for Eagers Automotive

The Last 12 Months Of Insider Transactions At Eagers Automotive

In fact, the recent purchase by Non-Executive Director Nicholas Politis was not their only acquisition of Eagers Automotive shares this year. They previously made an even bigger purchase of AU$2.1m worth of shares at a price of AU$10.54 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$10.30). It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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 insiders purchased 736.00k shares for AU$7.6m. But they sold 123.19k shares for AU$1.8m. Overall, Eagers Automotive insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Eagers Automotive Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Eagers Automotive insiders own about AU$210m worth of shares (which is 7.9% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Eagers Automotive Insider Transactions Indicate?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Eagers Automotive insiders are well aligned, and quite possibly think the share price is too low. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Eagers Automotive. To that end, you should learn about the 2 warning signs we've spotted with Eagers Automotive (including 1 which doesn't sit too well with us).

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.