Why this ASX 200 stock is climbing after a $2 million insider buy

Eagers Automotive Ltd (ASX: APE) is back on investors’ radar on Tuesday after a fresh sign of confidence from a major insider.

At the time of writing, the Eagers Automotive share price is up 3.07% to $21.46.

The car dealership group has now gained around 5% over the past week and about 23% over the past year.

Today’s move gives investors another reason to look at a stock that has been quietly climbing again.

So, what has the market been interested in today?

Eagers Automotive extends its buyback

In a statement to the ASX, Eagers Automotive told investors it intends to continue its on-market share buyback for another 12 months.

The buyback is set to begin on 1 July 2026 and run until 30 June 2027, subject to market conditions.

Under the program, the company can buy back up to 10% of its issued share capital.

That represents up to 28.2 million shares.

A buyback can be attractive to investors because it reduces the number of shares on issue when completed.

All else being equal, that can lift earnings per share (EPS) and increase the ownership stake of remaining shareholders.

Of course, the final impact depends on how many shares are actually bought back and the price paid.

Eagers Automotive said the buyback reflects the board’s focus on capital management and the company’s strong balance sheet.

Insider buying adds interest

The buyback update also follows a recent share purchase from businessman Nick Politis.

Mr Politis, a non-Executive Director of Eagers Automotive, recently spent about $2 million buying another 100,000 shares.

That lifted his holding to around 79.4 million shares.

The timing is likely to draw some attention, especially given the stock’s strong gains over the past year.

Broker still sees upside

Brokers are also weighing in following the recent share price move.

Bell Potter has reportedly cut its price target on Eagers Automotive by 2.6% to $28 per share.

Keep in mind, a lower price target is not usually something investors cheer.

But in this case, the new target still sits well above where the stock is trading today.

Based on the current Eagers Automotive share price of $21.26, the target points to potential upside of almost 32%.

That may be one reason the market is looking past the small target cut.

However, there are still some things to watch.

At its AGM, Eagers Automotive has warned that supply constraints are creating near-term uncertainty heading into the second half.

All eyes will be on whether that pressure eases and how well the company keeps margins moving in the right direction.

The post Why this ASX 200 stock is climbing after a $2 million insider buy appeared first on The Motley Fool Australia.

More reading

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• Bell Potter just tipped 12% to 34% upside for these consumer discretionary stocks
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• Why did ASX 200 retail shares lead the market last week?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Eagers Automotive Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.