Is a 21% drop in a month spurring insider buying on this ASX 200 stock? - Kalkine Media

October 24, 2023 09:35 PM AEDT | By Team Kalkine Media
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Bapcor Ltd (ASX: BAP), an ASX consumer stock, has seen its share price decline by a significant 21% in the past month. The recent dip might be one of the driving factors behind a series of insider purchases, as seven out of eight members of Bapcor's board of directors increased their holdings in the company. This trend follows a disappointing update delivered at the annual general meeting (AGM) and an 11.5% share price drop on the AGM day, closing at $5.91. 

Insider Buying Trend:  
An analysis of recent ASX disclosures reveals that seven board members of A participated in insider buying. These purchases occurred late last week, with all seven directors acquiring additional shares. 

Key Insider Buys: 

  • CEO and managing director, Noel Meehan, made the largest purchase, buying 35,778 Bapcor shares on-market at $5.5567 per share through a family superannuation fund, increasing his holdings in the fund by 28%. 
  • Kate Spargo, who was planning for retirement, purchased 10,000 more shares through her super fund on-market at $5.589 per share, raising her personal super holdings in Bapcor by 50% to 30,000 shares. 
  • Rebecca Dee-Bradbury, who joined the Bapcor board on September 1, acquired 10,000 shares on-market at $5.58 apiece through a family trust. 
  • Independent non-executive chair, Margaret Haseltine, bought 6,500 shares via her personal super fund on-market at $5.64 each. 
  • Mark Bernhard purchased 5,000 shares on-market at $5.78 per share, increasing his stake by 22% to 27,500 Bapcor shares. 
  • James Todd obtained 5,000 shares at the most favorable price in the group, paying $5.41 each on-market via his super fund. 
  • Brad Soller acquired 3,500 shares on-market at $5.519 apiece. 

Potential Reasons for Director Buys:  
While it is impossible to definitively ascertain each director's motivation for purchasing additional Bapcor shares, the recent 21% decline in the company's share price could be a motivating factor. Buying the dip is a common strategy for confident investors who believe in a company's future prospects. When share prices drop, purchasing additional stock at a lower cost can effectively reduce the average per-share value of all existing holdings, a technique known as dollar-cost averaging. Additionally, insider buys by company directors often provide reassurance to investors, as they convey a sense of confidence in the company's future. Directors' investments using their personal funds underscore their commitment to the business and are seen as a positive sign by market participants. 

Conclusion:  
The recent wave of insider purchases within Bapcor Ltd amidst a substantial share price decline may suggest that the company's board members perceive the stock as an attractive opportunity. While insider buys should not be the sole basis for investment decisions, they often indicate a level of confidence and commitment from those within the organization, which can resonate positively with investors considering ASX consumer stocks 


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