Insider Buying

2iQ Insider Brief: GB Group (GBG: LN) Nanoco Group (NANO: LN) Stroeer SE & Co KGAA (SAX: GR)

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GB Group (GBG: LN)

12-month performance: -8%
Insider activity: Bullish
Buying pattern: Purchases from CEO and CFO
Recent news: Good full-year results

GB Group is a UK-based technology company that focuses on identity management. The group helps businesses quickly validate and verify the identity and location of their customers with solutions that make use of machine learning, facial recognition, and other cutting-edge technologies. The stock is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and currently has a market capitalisation of £1 billion.

GB Group has grown significantly in recent years with revenues and earnings rising substantially, and full-year results for the year ended 31 March showed that growth is still robust. For the 12-month period, revenue jumped 20% and adjusted basic earnings per share rose 19%, while the dividend was hiked 13%. However, it seems the market was unimpressed with these numbers, as the shares have pulled back a little since the full-year results were announced in early June.
Source: 2iQ ResearchSource: 2iQ Research

Looking at insider transaction activity, we think the recent share price pullback may have provided an attractive entry point. We say this because late in June CEO Chris Clark spent £282,416 on GBG shares, boosting his personal holding by 43%, while CFO David Wilson also spent £179,199 on stock, which suggests these insiders expect the shares to rise going forward. With the company recently stating: “We are confident in our future growth and our ambition to become the leading provider of identity data intelligence solutions" and the CEO and CFO buying shares, we think it’s only a matter of time before the shares continue moving higher.
Nanoco Group (NANO: LN)

12-month performance: -70%
Insider activity: Bullish
Buying pattern: Purchases from multiple directors including CEO, CFO and Chairman
Recent news: Announced loss of a key contract

Nanoco Group is engaged in the development and manufacturing of heavy-metal free quantum dots and semiconductor nanoparticles which are used in display, lighting, solar energy, and bio-imaging products. The group’s core intellectual property revolves around four key areas: its proprietary mass production process, CFQD® quantum dot materials, surface chemistry, and applications/devices incorporating the company’s materials. The stock is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and currently has a market capitalisation of £40 million.

Nanoco shares fell heavily in June after the company announced that a key customer in the US had decided not to continue its contract with Nanoco after the contract ends in December 2019. Although Nanoco advised that the news was unconnected to the performance of its materials and its service delivery, and that it continues to work on a “number of opportunities in a range of sectors” the stock still fell by more than 70% on the news.
2iq research 2019Source: 2iQ Research

Looking at recent insider transactions, we believe there may be a disconnect between Nanoco’s recent share price decline and the future outlook for the company. This is due to the fact that since the news regarding the US customer was announced five separate directors have purchased shares in Nanoco, which suggests these insiders are confident about the future. Those buying have included CEO Michael Edelman, CFO Brian Tenner, CTO Nigel Pickett, and Chairman Christopher Richards – all of who are likely to have an excellent understanding of the group’s technology and its potential. With the share price down significantly and multiple insiders buying, we think Nanoco shares are worth a closer look right now.
Stroeer SE & Co KGAA (SAX: GR)

12-month performance: 25%
Insider activity: Bullish
Buying pattern: Bullish transactions from Co-CEO
Recent news: Solid Q1 results

Stroeer SE & Co KGAA is a German digital multi-channel media company. The group operates across three segments including content media, direct media, and out-of-home media, and offers advertising customers end-to-end solutions across the entire marketing and sales value chain. The stock is listed on the XETRA and currently has a market capitalisation of €3.6 billion.

We last covered Stroeer back in late April when the shares were trading around the €58 mark. At the time the group had just announced robust results for FY2018, and we noted that Co-CEO Udo Mueller had recently sold a large number of put options that expire in mid-to-late 2020, which suggested that the insider was bullish on the stock. As a result, we stated that the outlook for the stock remained favourable.
2iq research gmbh
Source: 2iQ Research

Fast forward to today, and Stroeer shares have risen 10% since our last report, which is a good result as Germany’s DAX index is up only 2% since then. However, analysing recent insider transaction activity, we think that further gains are possible. We say this because in June Co-CEO Mueller sold two more tranches of put options with a strike price of €72, which suggests the insider believes the share price will keep climbing. With the company recently reporting solid Q1 results in which sales climbed 14%, and the Co-CEO continuing to sell put options, we think the shares have the potential to keep rising.

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