Eugene Lee Bought 81% More Shares In Advance Auto Parts

Investors who take an interest in Advance Auto Parts, Inc. (NYSE:AAP) should definitely note that the Independent Chairman, Eugene Lee, recently paid US$57.65 per share to buy US$500k worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 81%, potentially signalling some real optimism.

Check out our latest analysis for Advance Auto Parts

Advance Auto Parts Insider Transactions Over The Last Year

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. That means that an insider was happy to buy shares at above the current price of US$59.82. Their view may have changed since then, but at least it shows they felt optimistic at the time. 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 Advance Auto Parts insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Advance Auto Parts

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. We usually like to see fairly high levels of insider ownership. Insiders own 0.4% of Advance Auto Parts shares, worth about US$15m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Advance Auto Parts Tell Us?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Advance Auto Parts we think they are probably pretty confident of a bright future. So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. Be aware that Advance Auto Parts is showing 3 warning signs in our investment analysis, and 1 of those is potentially serious…

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.