At 2iQ Research, we always stress the importance of cluster buying as a strong trading signal. Cluster buying is a form of insider trading where multiple company insiders buy considerable volumes of stock within a short period of time. This pattern can be a more reliable trading signal than solitary insider purchases.
In this report, as we have done for previous months (March 2021, February 2021), we highlight four stocks that saw cluster buying in April 2021. All four have seen significant purchases from at least three insiders recently.
Oslo-based mobile communications company, LINK Mobility Group ASA (LINK:NO) saw three insiders buy large volumes of stock:
- Chairman Jens Rugseth (500,000 shares)
- CEO Guillaume Van Gaver (25,000 shares)
- EVP M&A and Business Development Soeren Sundahl (150,000 shares)
Combined, as our report noted, these insiders bought more than $3.5 million worth of stock within a few days of each other.
LINK recently posted good Q4 results. Total operating revenue for the quarter was NOK 1.04 billion, a significant increase from the NOK 879 million figure posted in the same quarter in the previous year. The company’s enterprise segment reported organic growth of 18%, bringing total organic growth to just over 16%. This helped its adjusted EBITDA reach an all-time high of NOK 111 million with a margin of 11%.
Despite this performance of late, LINK’s shares have fallen in response to a sell-off in the technology sector recently. This bullish cluster suggests that LINK executives expect the stock to bounce back soon.
Bergman & Beving Aktiebolag
Swedish industrial supplier, Bergman & Beving Aktiebolag (BERGB:SS) has seen a large cluster of purchases in its executive team.
Six company insiders, including chief executive Pontus Boman and CFO Peter Schoen, purchased stock worth SEK 18.3 million. The sheer number of insiders involved in this purchase is a strong indicator that those within the company’s senior team believe the stock is undervalued.
The company closed its most recent quarter (Q3) with impressive results. The group increased its revenue by over 11% despite uncertain market conditions. Net profit increased 139%, thereby increasing EBITA to 84%.
Company officials said they believe the company has “great potential” in all its divisions and “considerable room for improvement.” They also said that the company intends to complete additional value-generating acquisitions in 2021.
Canadian e-learning platform, Docebo Inc (DCBO:CN) is another company of note.
- CFO Ian Kidson purchased 6,250 shares, spending $247,931 on stock
- Chief Revenue Officer Alessio Artuffo bought 6,430 shares, spending $251,927 on stock
- Board member William Anderson bought 5,500 shares, spending $213,051
Together, these executives spent around $713,000 on company stock within 2 days.
Docebo continued to grow at a significant rate as exhibited by its recent Q4 results. Quarterly revenue came in at $18.8 million, marking an increase of 53% compared to the same quarter in the previous year. Subscription revenue for the period was $16.7 million, representing 89% of total revenue.
CEO and founder, Claudio Erba stated:
“The challenges of the pandemic have accelerated a long-term trend towards the adoption of digital learning tools in the enterprise. Companies around the world, and individual departments within, are increasingly turning to Docebo to train their internal employees, partners, and customers.”
Senior PLC (SNR:LN) designs, manufactures, and markets high-technology components and systems for the principal original equipment producers in the aerospace, defense, land vehicle, and power and energy markets.
We reported significant cluster buying in this report.
- CEO David Squires purchased 55,000 company shares
- Company chairman Ian King purchased 100,000 shares after this, increasing his holding by just under 25%.
- Finance Director Bindi Foyle bought 38,788 shares at £1.18, increasing her holding by approximately 30%.
- Company Secretary Andrew Bodenham also purchased 42,950 shares at a price of £1.17 per share.
Senior PLC has been affected by Covid-19 and the grounding of Boeing’s Max 737 aircraft. 2020 revenue was down 34% year on year as a result. The company also acted swiftly to mitigate the situation and generated a free cash flow of £46.5 million.
David Squires expressed his optimism for the company’s future when he stated:
“Our differentiated offering in fluid conveyance and thermal management products; our investment in low carbon and advanced manufacturing technology; our global footprint; our strong track record and commitment to the highest ESG standards; and our positioning in attractive and diverse end markets will help to ensure that we emerge strongly as the recovery starts to take shape.”
This cluster suggests that optimism is high among senior stakeholders.