Acrow Formwork and Construction Services Reaches AU$240m Market Cap Benefiting Insider Stock Buying

Stock Analysis

Acrow Formwork and Construction Services Limited (ASX:ACF) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 13%, resulting in a AU$27m rise in the company's market capitalisation. As a result, the stock they originally bought for AU$675k is now worth AU$1.0m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Acrow Formwork and Construction Services

The CEO, MD & Executive Director Steven Boland made the biggest insider purchase in the last 12 months. That single transaction was for AU$145k worth of shares at a price of AU$0.72 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.90. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months insiders purchased 1.15m shares for AU$675k. But insiders sold 301.10k shares worth AU$160k. Overall, Acrow Formwork and Construction Services insiders were net buyers during the last year. Their average price was about AU$0.59. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Acrow Formwork and Construction Services is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

It's good to see that Acrow Formwork and Construction Services insiders have made notable investments in the company's shares. CEO, MD & Executive Director Steven Boland spent AU$145k on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Acrow Formwork and Construction Services insiders own 13% of the company, worth about AU$31m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in Acrow Formwork and Construction Services shares, given these transactions (along with notable insider ownership of the company). While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we found 4 warning signs for Acrow Formwork and Construction Services that deserve your attention before buying any shares.

But note: Acrow Formwork and Construction Services may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

Find out whether Acrow Formwork and Construction Services is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.

Acrow Formwork and Construction Services Limited provides engineered formwork, scaffolding and screen systems solutions, and in-house engineering and industrial labour supply services in Australia.

Very undervalued with solid track record.