Insiders are buying Accesso Technology shares. Should I buy too?

Three insiders at Accesso Technology just bought shares. Should Edward Sheldon buy the stock on the back of this director dealing?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

One thing I always keep an eye on as part of my investment research is insider buying (or ‘director dealing’). Insiders are some of the most informed participants in the market and their trades can provide us with valuable insights. Like the rest of us, insiders buy a stock for one key reason – they expect to make money.

Recently, I’ve noticed some interesting insider buying at Accesso Technology (LSE: ACSO). This is an under-the-radar UK company that specialises in virtual queuing and online ticketing solutions for amusement parks and other similar attractions. Is this director dealing an indicator that I should buy Accesso Technology shares? Let’s take a closer look.

Director dealing in Accesso Technology shares

Regulatory filings show that in late March, three insiders at Accesso Technology purchased shares. 

On 23 March, CEO Steve Brown bought 13,000 at a price of £5.75 per share. Then, on 25 March, non-executive director Andy Malpass picked up 18,000 at a price of £5.75. Finally, on 26 March, Chairman Bill Russell acquired 13,000 shares at a price of £5.80 each. 

Combined, these insiders spent just over £250k on Accesso Technology shares in the space of a few days.

Bullish insider buying

I think this director dealing is quite bullish when I consider that the global economy is about to reopen and there’s a lot of pent-up demand from consumers to visit theme parks, fairs, festivals, zoos, sports arenas, and other similar attractions.

It’s worth noting that in the company’s recent full-year 2020 results, posted on 23 March, management was quite optimistic about the future after a challenging year last year.

With vaccination programmes underway in our key geographies, we feel confident of a progression to more normal trading conditions in 2021. With the strength of our technology offering, solid relationships, and an amplified focus on technology by venue operators, we are well-set to re-embark on our growth journey,” said CEO Steve Brown.

We now have a growth-ready foundation on which to address substantial pent-up demand as the pandemic recedes,” he added.

Given the insider buying and the confident tone from management, I think the stock looks interesting right now from a ‘reopening play’ perspective.

My concerns

That said, I do have some concerns about investing in Accesso Technology shares.

One is that the company was experiencing some challenges before Covid-19. In 2019, for example, revenue was below guidance due to lower-than-anticipated new customer wins and adjusted basic earnings per share were down 54% year on year. So, this isn’t a company with a perfect growth track record.

Secondly, return on capital employed (a key measure of profitability) was quite low before Covid-19. In 2018, it was 2.4% while in 2017 it was 4.4%. So, unlike some of my favourite UK growth stocks such as Softcat and dotDigital, this isn’t a company that’s highly profitable on a consistent basis.

Should I buy Accesso Technology shares?

Weighing everything up, I’m not convinced that Accesso Technology is a great fit for my portfolio at the moment. I like to invest in companies with consistent growth track records and Accesso’s track record is a bit patchy.

Having said that, I think the stock could potentially move higher from here as the world reopens post-Covid.


Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Edward Sheldon owns shares in Softcat and dotDigital. The Motley Fool UK has recommended Accesso Technology, dotDigital Group, and Softcat. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Two gay men are walking through a Victorian shopping arcade
Investing Articles

The Burberry share price continues to rise despite falling sales!

Our writer looks at how the Burberry share price responded to the company’s first-quarter trading update, which was released earlier…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

What a crazy day for the share price of this FTSE 250 retailer!

Our writer’s taken time to digest the latest results of the FTSE 250’s Frasers Group. And he likes what he…

Read more »

Black woman using smartphone at home, watching stock charts.
Investing Articles

1 year on from the CrowdStrike IT outage, here’s how the S&P 500 stock has done

S&P 500 stock CrowdStrike tanked last year when the company caused a huge global IT outage. Its performance since then…

Read more »

Mixed-race female couple enjoying themselves on a walk
Growth Shares

Aiming to turn £10k into £20k? Here are 3 FTSE 250 shares for investors to consider

Our writer demonstrates how three vastly different FTSE 250 stocks could all double an investment over a decade – and…

Read more »

Burst your bubble thumbtack and balloon background
Investing Articles

The unanswered billion-dollar question hanging over the Helium One share price!

With the Helium One share price stuck around 1p, our writer tries to answer the question that he reckons every…

Read more »

UK financial background: share prices and stock graph overlaid on an image of the Union Jack
Investing Articles

Is the FTSE 100 becoming increasingly disconnected from the UK economy?

The FTSE 100's broken through the 9,000 barrier for the first time, yet the British economy's shrinking. Should investors be…

Read more »

Bearded man writing on notepad in front of computer
Investing Articles

I’ve just invested £12.06 in this FTSE 250 stock

Why has a FTSE 250 housebuilder that Stephen Wright's been watching for some time suddenly jumped to the top of…

Read more »

UK financial background: share prices and stock graph overlaid on an image of the Union Jack
Investing Articles

Why I think the FTSE 250 could outperform the FTSE 100 this decade

Our writer takes a lesson from history and outlines why he thinks the FTSE 250 could beat the FTSE 100…

Read more »