Insider purchases can be interpreted in many different ways, however, cases of cluster buying are typically a bullish signal.
Comprehensive cluster buying reports, like the ones prepared by 2iQ Research, include information about the insiders who made the purchases, their investment history, their relationship with the company and other important information (e.g. sale of restricted stock).
In this report, we look at three companies that saw substantial insider buying clusters in May 2021.
Emclaire Financial Corp (EMCF:US)
In the first week of May 2021 our analysts noted that two important Emclaire employees had increased their company holdings.
- Director Nick Varischetti purchased 21,751 shares at $27.30 per share, spending $593,802. This increased his holding by 46%.
- Director Mark Freemer purchased 5,400 shares at $27.30 per share, spending $147,420. This increased his holding by 26%.
This cluster was notable for two reasons:
- Both insiders are important executives who increased their holdings significantly
- The company itself is performing strongly
Emclaire posted record first-quarter earnings of $2.2 million in April 2021, bringing its diluted common share value to $0.79. This represents an 82.7% increase from its initial $0.44 value.
Chairman and Chief Executive William C. Marsh commented on this impressive performance:
“Now an entire year into the pandemic, the bank has proven its strength and resiliency as demonstrated through sound earnings, continued strong credit quality, and tremendous balance sheet growth.”
Horizon Global Corporation (HZN:US)
Horizon Global Corporation designs, manufactures and distributes custom-engineered towing, trailering, and cargo management accessories.
There was a large case of cluster buying in the second week of May 2021. The insiders were:
- Chairman John Kennedy (20,000 shares)
- President/CEO Terry Gohl (7,000 shares)
- Board member John Barrett (101,616 shares)
Combined, these insiders spent around $940,000.
This activity matched Horizon’s Q1 results. Horizon’s net sales reached $199.2 million for the period, a 22% year on year improvement. Operating profit was $6.8 million.
CEO Terry Grohl said: “We expect our global efforts to generate both near-and long-term value for our employees, customers, and shareholders”.
We consider this cluster to be bullish
Taaleri Oyj (TAALA:FH)
Taaleri Oyj is a Finnish financial services company with a market capitalization of €323 million. Taaleri saw a large cluster of insider purchases recently.
- 5 insiders including Founder and Chairman Juhana Elomaa and Group CEO Robin Lindahl bought a total of 46,487 company shares
- These purchases cost €850,000 in total
These purchases are worth highlighting because
- There were five insiders purchasing stock within a particularly short period of time
- Both Elomaa and Lindahl have excellent Trading IQ scores
Taaleri’s Q1 revenue figures for 2021 also surpassed all previous estimates, leading us to classify this insider trading activity as bullish.
Read more cluster buying reports on the 2iQ blog.