Insider Buying

2iQ Insider Brief: Novacyt SA (ALNOV: FP)

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Novacyt SA (ALNOV: FP)

12-month performance: +2,975%
Insider activity: Bullish
Buying pattern: Purchases from CEO and Chairman
Recent news: Launched Covid-19 test

Novacyt is a French biotechnology company that is focused on clinical diagnostics. The company is a specialist in cancer and infectious diseases and supports a large global customer base which includes hospitals and corporations. It is listed on the Euronext - Paris as well as the London Stock Exchange, and currently has a market capitalisation of €245 million.

Novacyt shares have enjoyed an extraordinary run this year, rising from €0.17 to €3.69 – a gain of around 2,070%. The reason the shares have surged is that in February, the company launched the first 'CE-Mark' molecular test to help detect the coronavirus. Since then, the company has received approval for its tests from the World Health Organisation (WHO), the US Food and Drug Administration (FDA) and a number of other major health bodies, and it has been contracted to deliver over £90 million worth of tests. Through its subsidiary, Primerdesign, the group is now looking to manufacture eight million Covid-19 tests per month from its Southampton site.

novocyt Chart                       Source: 2iQ Research

What looks interesting here is the fact that on 15 May, two top-level insiders purchased shares. Those buying included CEO Graham Mulls, who purchased 9,493 shares at a price of £3.10 per share and Chairman James Wakefield, who purchased 20,000 shares at a price of £3.05 shares. These purchases increased the insiders’ holdings by 119% and 18% respectively. This buying activity looks quite bullish in our view. It suggests that these insiders are confident about the future and expect the stock to continue rising. However, it’s worth pointing out that, after the stock’s strong recent run, short interest has surged recently. So, it’s probably a good idea to approach Novacyt with caution.