Insider Buying

2iQ Insider Brief: LeoVegas AB (LEO: SS)

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LeoVegas AB (LEO: SS)

12-month performance: +41%
Insider activity: Bullish
Buying pattern: Multiple insiders have purchased call options
Recent news: Good Q1 results

LeoVegas is a Swedish company that is focused on mobile gaming. The company offers a wide range of games including roulette, slots, jackpots, table games, blackjack, and baccarat, and describes itself as the ‘King of Casino.’ It is listed on the OMX Nordic Exchange Stockholm and currently has a market capitalisation of SEK 4.4 billion.

LeoVegas issued a good set of first-quarter results on 6 May. For the quarter ended 31 March, revenue increased 4% to €89.4 million, while adjusted earnings per share increased 50% to €0.06. The number of depositing customers was up 6% to 413,269. LeoVegas also advised that preliminary revenue in April amounted to €37.6 million – 23% higher than in April 2019. Growth was positively affected in markets where physical casinos have been temporarily closed due to Covid-19.

leovegas Chart                       Source: 2iQ Research

What has caught our eye here is the fact that a number of insiders have purchased call options on LEO shares recently. On 21 May, six different insiders purchased call options on LEO, including Group CEO Gustaf Hagman, CFO Stefan Nelson, COO Marten Forste, and CMO Dersim Sylwan. Combined, these insiders purchased 420,000 options. Investors buy call options when they expect the underlying security to rise. So, we see this insider activity as bullish. It suggests that these insiders are confident about the future and expect the stock to move higher.