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In the last year, multiple insiders have substantially increased their holdings of Advance Auto Parts, Inc. (NYSE:AAP) stock, indicating that insiders' optimism about the company's prospects has increased.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for Advance Auto Parts
The Last 12 Months Of Insider Transactions At Advance Auto Parts
In fact, the recent purchase by Independent Chairman Eugene Lee was not their only acquisition of Advance Auto Parts shares this year. They previously made an even bigger purchase of US$500k worth of shares at a price of US$65.51 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$59.82). 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. 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.
While Advance Auto Parts insiders bought shares during the last year, they didn't sell. 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 plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders At Advance Auto Parts Have Bought Stock Recently
Over the last quarter, Advance Auto Parts insiders have spent a meaningful amount on shares. Specifically, Independent Chairman Eugene Lee bought US$500k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Does Advance Auto Parts Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Advance Auto Parts insiders own about US$15m worth of shares. That equates to 0.4% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.