2iQ Insider Brief: S&T AG (SANT: GR) SIGA Technologies (SIGA: US) Kongsberg Automotive (KOA: NO)

Desislav Delchev 23 December 2019



12-month performance: +30%
Insider activity: Bullish
Buying pattern: Multiple purchases from Chairman
Recent news: Good Q3 results

S&T AG is an Austrian supplier of IT solutions that has a particular focus on Industry 4.0, embedded computer systems, and Internet of Things (IoT) technology. Operating across Germany, Austria, Switzerland, Eastern Europe and North America, the group has over 4,000 employees working for its subsidiaries. The stock is listed on the Frankfurt Stock Exchange and currently has a market capitalisation of €1.4 billion.

S&T issued a good set of third-quarter results in November. For the nine-month period to 30 September, revenue increased 14% to €660 million, while EBITDA rose 25% to €72 million. Meanwhile, cash and cash equivalents grew to €261 million, up from €172 million last year. The group said that it looks “confidently” at the rest of the financial year and its future prospects.

first-2                    Source: 2iQ Research

Looking at insider transaction activity, we think it’s interesting that Chairman and CEO Hannes Niederhauser has purchased S&T shares three times so far this month. According to our records, the insider has acquired 25,013 shares, spending over half a million euros on stock. The average price he paid was €20.52. These purchases suggest that he is confident about the future and expects the stock to rise. With that in mind, we believe the outlook for S&T is favourable.

SIGA Technologies (SIGA: US)

12-month performance: -28%
Insider activity: Bullish
Buying pattern: Purchases from multiple directors including CEO and CFO
Recent news: Announced a potential deal

SIGA Technologies is a commercial-stage pharmaceutical company that specialises in the development of solutions that protect against chemical, biological, radiological, and nuclear (CBRN) threats, as well as emerging infectious diseases. The stock is listed on the NASDAQ Global Market and currently has a market capitalisation of $381 million.

On 5th December, SIGA Technologies announced that the Canadian Department of National Defence (CDND) had issued an advanced contract award notice (ACAN), indicating that it intends to purchase up to 15,325 courses of SIGA’s lead product TPOXX – an orally administered antiviral drug that targets orthopoxviruses infections. The contract would represent the first international order for TPOXX. “This type of initial procurement by the Canadian military, in advance of Canadian regulatory approval, would be a natural first step in our efforts to build an international business for oral TPOXX. We are pleased that the value of TPOXX as an important component of smallpox preparedness is being recognised outside the United States,” said Dr. Phil Gomez, SIGA Technologies’ CEO.

second-1                   Source: 2iQ Research

What’s interesting here is that shortly after this announcement, four directors, including CEO Phil Gomez and CFO Daniel Luckshire, purchased SIGA Technologies shares. In our view, this is a bullish signal as these insiders are likely to have an excellent understanding of the group’s future prospects. With the company recently announcing its first international order, and multiple directors buying shares, we think the stock is worth a closer look right now.

Kongsberg Automotive (KOA: NO)

12-month performance: -28%
Insider activity: Bullish
Buying pattern: Purchases from major shareholder
Recent news: Solid Q3 results

Kongsberg Automotive is a Norwegian company that supplies products to the global automotive industry. The group’s products, which include powertrain and chassis products, seat comfort products, and specialty products, enhance the driving experience, making it both safer and more comfortable. The stock is listed on the Oslo Stock Exchange and currently has a market capitalisation of NOK 2.6 billion.

Kongsberg Automotive shares have underperformed over the last six months amid the US-China trade war. However, in late November, the group advised that in spite of the challenging macro environment and overall market declines, it expects to deliver above-market revenue growth in fiscal year 2020. It also said that it expects revenue of €293 million for the fourth quarter of this year, which would represent an increase of 2% on the same period last year.

third-3                   Source: 2iQ Research

Examining insider transaction activity, we think it’s interesting that Kongsberg’s largest shareholder, Teleios Capital, has been adding to its holding recently, purchasing 915,454 shares on 2 December, and 500,897 shares on 13 December. The reason this is interesting is that Firas Abi-Nassif, who co-founded Teleios Capital, is the Chairman of Kongsberg Automotive, so these purchases are very much insider purchases. It’s also worth noting that a number of other insiders have purchased stock since mid-November including CFO Norbert Loers, while Nordea Funds – a 10% owner – boosted its holding in November as well. Given this level of insider buying, we think the stock could be set for a rebound.

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