Following insider buying at smaller companies can be a very profitable trading strategy. Smaller companies are less researched than larger businesses, meaning that they offer greater potential for outperformance.
In this report, we are going to highlight some insider buying at a small Canadian company, NanoXplore Inc (GRA:CN). NanoXplore is a graphene company that operates a 4,000-metric tons per year graphene powder production facility in Quebec and serves customers in a range of industries. It is listed on the Toronto Stock Exchange and currently has a market cap of around CAD $526.3 million.
Our data shows that between July 6 and July 7, board member Catherine Loubier bought 72,200 GRA shares at an average price of CAD $3.32 per share. This buying activity cost the insider over CAD $240,000.
Ms. Loubier has an interesting background. A senior advisor to the corporate world, she previously spent nearly 10 years in the federal government, including as senior advisor to the 22nd Prime Minister of Canada from 2013 to 2015. Meanwhile, between 2015 and 2018, she advised business leaders in various industries, including the President and CEO of Alliance Renault Nissan Mitsubishi. Given her experience in the corporate and government worlds, her buying activity is notable.
Strong Q3 Results
NanoXplore recently produced a strong set of results for the third quarter of its fiscal year.
For the period, total revenues were up 11% year on year. Meanwhile, adjusted EBITDA came in at a record $0.5 million, up $2.8 million on the prior-year quarter. Cash flow from operations was $1.6 million.
On the back of these results, the company raised its revenue guidance for the full year. It now expects revenue of $120-125 million versus previous guidance of $115-120 million. This implies year-on-year revenue growth of 27-33%.
“Despite economic uncertainties, we reported strong results and achieved record adjusted EBITDA reflecting a favorable fundamental backdrop and continued strong execution by the entire team at NanoXplore. In addition, our graphene business is performing well and our customer trials results have improved considerably which bodes well for the future,” commented President and CEO Soroush Nazarpour.
In light of these results, we see the insider buying here as a bullish development.