If multiple insiders at the same organization are buying company stock simultaneously, it’s often worth taking a closer look. This buying pattern – which is known as ‘cluster buying’ – is a particularly strong insider trading signal.

Here, we are going to highlight a cluster buying pattern at Arise AB (ARISE:SS). Arise is a Swedish company that operates in renewable energy. Vertically integrated, it manages a portfolio of wind farms across Sweden, Norway, and Scotland that has a total capacity of 2,600 MW. It’s listed on the Stockholm Stock Exchange and currently has a market capitalization of SEK 2.32 billion (approx. $206 million).

Insider Buying at Arise AB

Our insider transaction data shows that between November 9 and November 10, three insiders at Arise bought stock. Those who bought shares were:

Chairman of the Board: Joachim Gahn (20,000 shares @ SEK 44.03 per share)
Independent Director: Johan Damne (30,000 shares @ SEK 48.67 per share)
Close relative of C Level insider: Johan Claesson (115,532 shares @ 48.53 SEK per share)

In total, the three insiders spent around SEK 8 million (approx. $750,000) on Arise stock.

First Insider Buys Since 2020

There are a few things to note about this cluster buying pattern.

Firstly, it represents the first insider buying at the company since September 2020. This suggests that insiders see value in the stock right now.

Secondly, the three insiders have spent a significant sum of money on company stock. It’s worth pointing out that Mr. Damne has increased his holding by around 22% and Mr. Gahm has increased his holding by about 300%.

Strong Financial Performance

Arise recently posted a strong set of Q3 results.

The net sales figure for Q3 was SEK 917 million. This was significantly higher than the SEK 180 million achieved in Q3 2021. Meanwhile, profit after tax was SEK 705 million versus SEK 54 million a year earlier. Operating cash flow was SEK 792 million versus SEK 93 million a year earlier.

During the quarter, the sale of wind farm project Kolvallen was completed. The sale is expected to have a positive earnings effect of approximately €90 million between 2022 and 2025, of which approximately €65 was recognized when the project was sold. Income from the sale will allow the company to make investments to accelerate growth in the future.

In light of the growth here, we see the recent insider buying as a bullish event.

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