Top-level insiders tend to have an excellent understanding of their companies’ operating activities. If they’re buying company stock, it’s often a sign that the outlook for the business, and its share price, is attractive.
In this report, we are going to highlight large legal insider trade from a top-level insider at Segro PLC (SGRO). Segro is a UK-listed real estate investment trust (REIT). Operating in the UK and Europe, it is focused on warehousing and industrial property. It’s listed on the London Stock Exchange and currently has a market cap of approximately £9.92 billion.
Insider Buying at Segro
2iQ data shows that between February 20 and March 6, Segro’s Chairman Andy Harrison bought 343,926 shares at an average price of £8.30 per share. These trades cost the insider just under £2.85 million and increased his holding to 460,241 shares.
It’s the size of the trade that is notable here. Our data shows that Mr. Harrison has made stock purchases before. Indeed, since he became Chairman in June 2022, he has purchased stock several times. However, these purchases is his largest by a wide margin. This suggests that he sees a lot of value in the stock right now.
It’s worth noting that Mr. Harrison is an experienced businessman. Previously, he served as CEO of FTSE 100 hotel operator Whitbread and CEO of British budget airline easyJet. He is therefore likely to have a good understanding of Segro’s potential.
Solid 2022 Results
Segro recently posted a solid set of results for 2022.
While adjusted NAV per share was down 15% to £9.66, driven by a portfolio valuation decline of 11%, adjusted pre-tax profit was up 8.4% year on year to £386 million. Net rental income came in at £522 million, up 18.9% year on year, thanks to strong occupier demand and strong like-for-like rental growth.
On the back of these results, the company raised its full-year dividend to 26.3 pence, up from 24.3 pence a year earlier.
Looking ahead, the company said that its prime portfolio, excellent land bank, development expertise, and balance sheet capacity put it in a good position to deliver attractive returns and further growth. It noted that its warehouses continue to be in high demand from a diverse range of occupiers, underpinned by long-term structural drivers.
Since the company’s full-year results, several brokers have raised their price targets for the stock. RBC has raised its target price to £9.75 from £9.25 while Berenberg has raised its target price to £11.00p from £10.40.
In light of these results, and the broker price target increases, we see the insider buying as a bullish development.