Insider Buying

2iQ Insider Brief: GEI:CN, ROU:BB, PNDORA:DC

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Gibson Energy (GEI: CN)

12-month performance: +13%
Insider activity: Bullish
Buying pattern: Multiple director purchases including CTO
Recent news: Solid Q2 results and multiple broker upgrades

Gibson Energy is an integrated service provider to the oil and gas industry that provides midstream energy infrastructure and logistics services to customers across North America. The group is involved in the movement, storage, blending, processing and distribution of crude oil, natural gas liquids, oilfield waste and refined products. Listed on the Toronto Stock Exchange, the group currently has a market capitalization of CAD $2.8 billion.

Gibson energy shares have moved higher over the last three months, rising over 10%. Investors were pleased with second-quarter results, which saw adjusted EBITDA rise 71% on the same quarter last year, and the stock has also recently received target price upgrades from several brokers, with Canaccord Genuity lifting its price target for the company from CAD $20 to CAD $22 on 13 August. Can Gibson Energy’s upward momentum continue?

Gibson Energy performance

Source: 2iQ Research

Insider transaction activity at Gibson Energy certainly looks quite bullish. In August, four different directors purchased large parcels of shares in the company, including CFO Sean Brown who bought 10,527 shares on 21 August for a total consideration of approximately CAD $208,000. This purchase boosted his holding by 49%. It’s also worth noting that Chairman James Estey has bought stock in recent months with the key insider picking up 19,400 shares in May. Given this level of insider buying, we believe Gibson Energy could have potential for further gains.

Roularta Media Group (ROU: BB)

12-month performance: +11%
Insider activity: Bullish
Buying pattern: Large CEO purchase
Recent news: Poor half-year results

Roularta Media Group is a Belgian multimedia group that is involved in the publication and printing of a wide variety of magazines and newspapers. It also has an audiovisual media business that focuses on TV and radio advertising as well as production and broadcasting. A small-cap stock, the company has a market capitalization of just €219 million.

Roularta released half-year results on 17 August and the numbers were disappointing. Revenue declined 4.7% to €125.6 million due to advertising revenues falling 10.9%, and EBIT fell to €-73.1 million, from €-4.7 million last year, due to a significant impairment charge. However, the company has made a series of acquisitions recently, and noted in the half-year results that the integration of a number of “strong brands” will have a “positive impact” in the second half of the year. Can the company turn things around?

Roularta Media Group performance

Source: 2iQ Research

One thing that looks interesting here is a recent insider transaction. On 17 August, the same day as the half-year results, Executive Chairman and former CEO Rik De Nolf took the opportunity to purchase 1.5 million shares at a share price of €13.26, for a total consideration of €19.9 million. The shares were acquired from his brother-in-law Leo Claeys. This recent purchase means that De Nolf now owns more than 68% of the group which suggests he’s bullish on its prospects. With that in mind, Roularta could be a stock to watch closely going forward.

Pandora AS (PNDORA: DC)

12-month performance: -41%
Insider activity: Bullish
Buying pattern: Large CFO purchase
Recent news: Consecutive profit warnings

Headquartered in Copenhagen, Pandora AS is a Danish company that is engaged in the design, manufacture and marketing of hand-finished and contemporary jewellery. The company’s products are sold in over 100 countries across six continents through more than 7,700 points of sale, including 2,500 concept stores. Listed on the Nasdaq Copenhagen stock exchange, the group generated revenue of DKK 22.8 billion in 2017.

After a spectacular rise between 2012 and 2016, Pandora shares have fallen significantly since the beginning of last year, declining from over DKK 900 to just DKK 390 today. The company has been hit by declining sales and thinning margins, as younger consumers have spent more on technology and experiences and less on jewellery. In May, the group warned of a slowdown in the Chinese market, and more recently in August, the company issued another profit warning and lowered its sales and profit margin guidance for the year. CEO Anders Colding Friis also recently announced that he would be stepping down at the end of August. Unsurprisingly, investors were not impressed, with analysts at Berenberg stating:

Another profit warning just a few months after the updated mid-term targets may put the credibility of the current strategy and management team in question.

So, what’s next for Pandora? Can the company turn things around or is the stock likely to keep falling?

Pandora AS performance

Source: 2iQ Research

Looking at recent insider transaction activity here, at least one top-tier director has confidence in the company and that’s CFO Anders Boyer-Sogaard. On 21 August, the key insider acquired 12,950 shares for a total consideration of more than USD $750,000, which is clearly a large purchase. However, it should be noted that Boyer-Sogaard has only recently been appointed as CFO, meaning that the transaction carries less weight from an insider transaction perspective. As such, we will wait to see if any other directors follow Boyer-Sogaard’s lead and purchase stock in the coming months before we draw any strong conclusions about Pandora shares.