Investors are buying up ARB (ASX:ARB) shares this month, but the company chair has been selling

ARB shares have been risen, but the chair has been selling shares.
The post Investors are buying up ARB (ASX:ARB) shares this month, but the company chair has been selling appeared first on The Motley Fool Australia. –

The ARB Corporation Limited (ASX: ARB) share price has risen by around 13% over the last month.

That compares to the S&P/ASX 200 Index (ASX: XJO) which has only risen by 2%, meaning ARB has outperformed the index by more than 10%.

However, whilst ARB shares have continued to go up, the company’s leadership has been selling shares.

Leadership share sale

Mr Roger Brown is the chair of ARB, the four-wheel drive accessories business. Andrew Brown is the managing director of ARB. Their shares are held ‘in common’, which essentially means the ARB shares they own are held in entities they both have an interest in.

In May 2019, there was a sale of 2 million shares at a price of $18.50 per share.

On 4 November 2021, there was another sale of 1 million shares at an ARB share price of $49.50. That implies that the sale amounted to around $50 million of ARB shares.

However, whilst the sale was done at a price of $49.50, the current ARB share price is now 6% higher at $52.60.

Is the ARB share price overvalued?

Investors may be wondering if this means that the management believe the stock is priced too highly. Only the leadership know the answer to their own their thoughts about the business valuation.

But, history has shown the ARB share price has risen substantially (up 184%) from the last share sale. Time will tell whether the same applies again here.

It may be useful to know what analysts think about the business value at the moment.

Some recent broker notes have been positive about the business. Both Morgan Stanley and Citi think ARB is still a buy, with price targets of $56 and $55.45 respectively. After seeing the recent trading update, the brokers think that FY22 will show growth after the COVID impacts.

On Citi’s numbers, the ARB share price is valued at 37x FY22’s estimated earnings.


In the company’s annual general meeting (AGM) update, it said that in the first quarter of FY22 it saw “pleasing sales and profit growth”.

However, there are a number of challenges in the current environment including vehicle supply interruptions, COVID-19 related impacts and the cost and reliability of freight services.

It said that its order book remains strong, both domestically and internationally, and it’s continuing its product development work, store development program in Australia and the expansion of its manufacturing capability.

ARB is expecting sales and profit growth to continue in the first half. It also believes it’s well positioned to achieve long-term success with its brands around the world, increasing manufacturing and distribution capacity and a strong balance sheet to take advantage of opportunities as they arise.

The company also announced a few months ago that a range of ARB accessories would become available at participating Ford dealers for Ranger and Everest vehicles. This will be rolled out in Australia initially, with other selected Ford markets to follow.

The post Investors are buying up ARB (ASX:ARB) shares this month, but the company chair has been selling appeared first on The Motley Fool Australia.

Should you invest $1,000 in ARB right now?

Before you consider ARB, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and ARB wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why are ASX 200 mining shares having such a lousy day?

ASX 200 (ASX:XJO) midday update: NAB hits 52-week high, CSL upgraded

2 ASX 200 shares that could be top buys for dividends

5 things to watch on the ASX 200 on Wednesday

Here are the top 10 ASX shares today

Motley Fool contributor Tristan Harrison 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 ARB Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!