Insider Buying

2iQ Insider Brief: YIT Corp (YIT: HF) LVMH Moet Hennessy - Louis Vuitton SE (MC: FP) Supreme Cannabis Co Inc (FIRE: CN)

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YIT Corp (YIT: HF)

 12-month performance: -14%
Insider activity: Bullish
Buying pattern: Purchases from multiple directors including CEO, CFO and Chairman
Recent news: Good Q2 results


YIT is a Finnish construction company. Specialising in the construction of apartments and business premises, the group operates in 11 countries, including Finland, Russia, and Poland. The stock is listed on the OMX Nordic Exchange - Helsinki and currently has a market capitalisation of €1.1 billion.


YIT Corp shares jumped on 25 July after the company reported better-than-expected Q2 results. While revenue for the quarter was roughly in line with revenue for the same period last year, adjusted operating profit for the period came in at €28.5 million, up 40% on the second quarter of 2018. The group also advised that for the full year, it expects adjusted operating profit from continuing operations of €160-€200 million, up from €132 million last year.


Since the Q2 results, YIT shares have pulled back from €5.60 to around €5 and we think this has created a buying opportunity. We say this because since the results five top directors have purchased in the company – including the President/CEO, CFO, Chairman, and Non-Executive Vice Chairman – which is an extremely bullish signal in our view as these insiders are likely to have an excellent understanding of the company’s future prospects. With multiple directors adding to their positions, we believe there’s a good chance the stock could outperform.


LVMH Moet Hennessy - Louis Vuitton SE (MC: FP)

 12-month performance: +29%
Insider activity: Bullish
Buying pattern: Large purchases from Chairman
Recent news: Good half-year results


LVMH Moet Hennessy Louis Vuitton SE is a French luxury goods company. The group owns approximately 70 brands across the fashion, perfume & cosmetics, watches & jewellery, and alcoholic beverage industries, and has nearly 4,000 stores across the world. The stock is listed on the Euronext - Paris and currently has a market capitalisation of €191 billion.


LVMH shares have performed well this year, rising 47%. The stock received a boost in late January when the group reported record full-year results, and since then it has continued climbing. Recent half-year results, released on 24 July, showed that the company still has plenty of momentum – revenue for the period was up 15%, beating expectations, while profit from recurring operations increased 14% on the same period last year.


What we think is interesting about LVMH is that in late July Chairman and CEO Bernard Arnault – who is one of the richest men in the world – purchased €22.4million worth of shares in the company, despite the fact the shares are up nearly 50% this year. This suggests that the French business magnate believes the stock still offers value at current levels. With a number of brokers recently upgrading their price targets for LVMH, including Citigroup and Jefferies, who lifted their price targets to €430 and €400 respectively, and Arnault adding to his holding, we think the shares could have further upside.


Supreme Cannabis Co Inc (FIRE: CN)

 12-month performance: -6%
Insider activity: Bullish
Buying pattern: Purchases from multiple directors including CEO and CFO
Recent news: Announced acquisition


Supreme Cannabis Company Inc is a Canadian company that is focused on developing businesses in the cannabis market. The group’s 7ACRES venture – a 342,000 square foot greenhouse facility located in Kincardine, Ontario – is the only licensed producer focused on cultivating craft-quality cannabis at commercial scale. The stock is listed on the Toronto Stock Exchange and currently has a market capitalisation of CAD $439 million.


We last covered Supreme Cannabis in early February. At the time, we observed that a number of directors were buying shares and we stated that, in our view, the outlook for the stock was favourable. Since our last report, however, the stock has underperformed, falling from $2.20 to $1.35, despite the fact that the company has made progress in a number of areas. 


Analysing insider transaction activity, we continue to believe that the outlook for the stock is favourable. We say this because in late July three directors, including CEO Navdeep Dhaliwal, CFO Nikhil Handa, and Independent Director Kenneth McKinnon, purchased a significant number of Supreme shares which suggests these insiders are confident about the future. With the company recently signing a number of key deals and announcing the acquisition of global medical brand Truverra, and three insiders picking up shares, we think the stock could be poised for a rebound.

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