Aegis Logistics Limited, together with its subsidiaries, operates as an oil, gas, and chemical logistics company in the downstream oil and gas sector. Aegis Logistics’s insiders have invested 241.97k shares in the large-cap stocks within the past three months. It is widely considered that insider buying stock in their own companies is potentially a bullish signal. A research published in The MIT Press (1998) concluded that stocks following insider buying outperformed the market by 4.5%. However, it may not be sufficient to base your investment decision merely on these signals. I’ve assessed two potential reasons behind the insiders’ latest motivation to buy more shares.
View our latest analysis for Aegis Logistics
Which Insiders Are Buying?
There were more Aegis Logistics insiders that have bought shares than those that have sold. In total, individual insiders own less than one million shares in the business, or around 0.0050% of total shares outstanding.
. The entity that bought on the open market in the last three months was PHINMA Energy Corporation. Although this is an institutional investor, rather than a company executive or board member, the insights gained from direct access to management as a large investor would make it more well-informed than the average retail investor. In this specific instance, I would classify this investor as a company insider.
Is This Consistent With Future Growth?
On the surface, analysts’ earnings growth projection of 98.4% over the next three years provides an exceptional outlook for the business which is consistent with the signal company insiders are sending with their net buying activity.
Probing further into annual growth rates, analysts anticipate a double-digit top-line growth over the next year, which is expected to drive significant expected earnings growth as well. This may mean the company is reaping meaningful benefits from past growth initiatives, placing it in a beneficial position for future profits.
Insiders recognising these benefits as defensible may accumulate their shares in the company. Another reason could simply be they deem the shares under-priced given the growth potential the business could produce.
Did Stock Price Volatility Instigate Buying?
Another factor we should consider is whether the timing of these insider transactions coincide with any significant share price movements. Volatility provides an opportunity to trade on market inefficiencies when the stock is under-priced compared to the stock’s intrinsic value.
In the past three months, Aegis Logistics’s share price reached a high of ₹252.45 and a low of ₹203.65. This suggests moderate volatility with a share price movement of 23.96%.