2iQ Insider Brief: Scandinavian Tobacco Group (STG: DC)

Desislav Delchev 5 June 2020

Scandinavian Tobacco Group (STG: DC)

12-month performance: +28%
Insider activity: Bullish
Buying pattern: Purchases from CEO, CFO and Vice Chairman
Recent news: Solid Q1 results

Scandinavian Tobacco Group is a Danish company that manufactures cigars and pipe tobacco. The company has a worldwide presence, with sales in more than 100 countries, and it has a market-leading position in the cigar industry in the US. It is listed on the OMX Nordic Exchange - Copenhagen and currently has a market capitalisation of DKK 10.1 billion.

Scandinavian Tobacco Group recently issued a solid set of first-quarter results. For the quarter, net sales rose 22% on the same period last year to DKK 1,791 million (including organic growth of 5%), while EBITDA before special items increased 36% to DKK 326 million (organic growth of 23.9%). Adjusted earnings per share rose to DKK 1.4 from DKK 1.1. “In the middle of an unprecedented global pandemic with a high degree of volatility and uncertainty in most markets, we are able to present a solid result for the first three months of 2020,” said CEO Niels Frederiksen.

scandinavian tobacco chart                         Source: 2iQ Research

What stands out to us here is the fact that since 20 May, three top-level insiders have purchased STG shares. Those buying have included Vice Chairman of the Board Henrik Brandt (24,558 shares @ DKK 89.37 per share on 20 May), CFO Marianne Bock (2,300 shares @ DKK 95.22 per share on 25 May), and CEO Niels Frederiksen (21,368 shares @ DKK 97.82 per share on 27 May). Combined, these purchases represented the largest amount of insider buying at Scandinavian Tobacco Group in over two years. We see this pattern of buying as a bullish signal.

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