Insider Buying

2iQ Insider Brief: CIE Financiere Richemont(CFR SW) Just Group PLC(JUST LN) Wienerberger AG(WIE AV)

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CIE Financiere Richemont (CFR: SW) 

12-month performance: -14%
Insider activity: Bullish
Buying pattern: Large purchases from Chairman
Recent news: Good full-year results


CIE Financiere Richemont is a Swiss luxury goods company that was founded in 1988. Through its various subsidiaries, the company produces and sells jewellery, watches, leather goods, pens, firearms, and clothing, and its brands include Cartier, Dunhill, IWC Schaffhausen, Montblanc, and Officine Panerai. The stock is listed on the SIX Swiss Exchange and currently has a market capitalisation of €42.2 billion.

After falling significantly in the fourth quarter of 2018 on the back of concerns over global growth and lower Chinese consumption, Richemont shares have rallied this year, rising from around €60 at the start of the year to over €80 today. Recent news flow appears to have allayed investors’ growth concerns, with the company announcing in May that sales of its watches and jewellery grew by 10% in the year to the end of March and that net profit for the year more than doubled to €2.8 billion.


Source: 2iQ Research

What we think is interesting about Richemont is that billionaire Chairman Johann Rupert, who founded the company in 1988, has bought an extraordinarily large quantity of shares over the last three weeks. According to our records, the billionaire has purchased USD $300 million worth of shares since 22 May. We see this as a bullish signal, as it suggests that Rupert – who is likely to have an excellent understanding of Richemont and its future prospects having founded the company over 30 years ago – is confident about the future. With that kind of insider money flooding into the shares, we think the outlook for Richemont is favourable.


Just Group (JUST: LN)

 12-month performance: -65%
Insider activity: Bullish
Buying pattern: Purchases from three non-executive directors
Recent news: Recently announced a new CFO

Just Group is a specialist financial services company that is focused on the UK retirement income market. Its products include defined benefit pension de-risking solutions, flexible pension plans, equity release mortgages, and insurance. The stock is listed on the London Stock Exchange and currently has a market capitalisation of £510 million.


Just Group shares have had a poor run this year for a number of reasons. Not only has the Prudential Regulation Authority’s (PRA) recent consultation on equity release mortgages created uncertainty for the group, but it was also forced to raise debt and equity in March in an effort to strengthen its balance sheet amid changes to capital requirement rules. Additionally, the group has been without a permanent CFO since October 2018, and CEO Rodney Cook announced recently that he would be stepping down. Year to date, the stock is down 46%.


Source: 2iQ Research

Looking at recent insider transaction activity, we think Just Group shares may be oversold. We say this because in the last week three non-executive directors have purchased shares in the company, which suggests that these insiders expect the shares to rise from here. With the company announcing a new CFO this week and multiple directors buying, we think Just Group has the potential to move higher.


Wienerberger AG (WIE: AV)

 12-month performance: -2%
Insider activity: Bullish
Buying pattern: Purchases from CEO and CFO
Recent news: Good Q1 results


Founded in Vienna in 1819, Wienerberger is an international building materials company that specialises in wall, roof and landscaping innovations. The group is also the world’s largest manufacturer of bricks. The company is listed on the Vienna Stock Exchange and currently has a market capitalisation of €2.4 billion.


We last covered Wienerberger in late August after the stock had surged higher on the back of strong Q2 results. We thought the stock had the potential for more gains as CEO Heimo Scheuch had purchased a large number of shares immediately after the results, which, in our view, was a bullish signal. However, we have not seen the gains that we were expecting as the stock was hit hard in the global equity market sell-off late last year and is yet to fully recover, even though recent news flow has actually been quite positive.


Source: 2iQ Research

Analysing recent insider transaction activity, we remain bullish on the stock. This is due to the fact that in the last fortnight, both CEO Heimo Scheuch and CFO Willy Van Riet have purchased more shares in the company, which suggests these insiders are confident about the future. Scheuch’s purchase is particularly notable as it was worth nearly €200,000. With the company releasing strong Q1 results in which revenue jumped 15% and adjusted EBITDA hit an all-time high, and top-tier directors buying, we think the shares are worth a closer look right now.

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