Insider Buying

2iQ Insider Brief: Zalando SE (ZAL: GR)

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Zalando SE (ZAL: GR)

12-month performance: +43%
Insider activity: Bullish
Buying pattern: Large purchase from Chairman of Supervisory Board
Recent news: Good trading update

Zalando is an online fashion retailer. Founded in 2008, the company has grown to be Europe’s largest online fashion platform, serving customers in 17 countries and generating sales of €6.5 billion in 2019. The company is listed on the XETRA and currently has a market capitalisation of €13.4 billion.

Zalando shares fell sharply when equity markets tanked earlier in the year. After trading near €50 in mid-February, the stock fell to €27 in March. However, since then, ZAL has staged a phenomenal rebound to €53 on the back of several encouraging trading updates. In mid-April, the company said it was “optimistic” for the second quarter after sales picked up in April following a decline in March. Then, on 7 May, the company advised that it expects full-year sales growth of 10%-20% and a return to profitability following an initial hit from coronavirus lockdowns.

zalando chart                        Source: 2iQ Research

What looks interesting here is that on 8 May, Chairman of the Supervisory Board, Cristina Stenbeck, purchased 38,000 shares, spending nearly €2 million on stock. We see this insider purchase as a bullish signal. The last time Stenbeck purchased shares was on 16 January, shortly before the company announced excellent results for 2019 (which included a very strong performance in Q4). That purchase was worth €466,200. This recent purchase was worth over four times that amount. Given the size of this insider purchase, we think the outlook for Zalando is favourable.