2iQ Insider Brief: BANG & OLUFSEN AS (BO: DC)

Bang & Olufsen AS (BO: DC)

12-month performance: -37%
Insider activity: Bullish
Buying pattern: Purchases from multiple insiders including Chairman and CFO
Recent news: Issued full-year results

Bang & Olufsen is a Danish luxury lifestyle company that designs, develops, and markets high-end audio and video equipment. The company operates in over 70 markets worldwide, selling its products in mono-branded stores, multi-branded stores, and online. It is listed on the OMX Nordic Exchange - Copenhagen and currently has a market capitalisation of DKK 1.5 billion.

2019/2020 was a disappointing year for Bang & Olufsen. As a result of Covid-19 lockdowns, and a lack of progress on the company’s ongoing transition towards a demand-driven retail model, revenue declined 29% in local currency terms. Meanwhile, earnings before tax fell to DKK -367 million, down from DKK 33 million last year. However, management appears to be confident about the future. “In 2020/21, we expect to return to growth, driven by product launches in all categories, stronger sales and marketing execution, and the continued transition of our retail network with focus on our core markets,” said CEO Kristian Teär recently.

Screenshot_1    Source : 2iQ Research    

What looks interesting here is that immediately after Bang & Olufsen issued its full-year results on 7 July, three insiders purchased BO shares. Those buying included Chairman Juha Christensen (85,000 shares), CFO Nikolaj Wendelboe (44,000 shares), and Director Claire Chung (26,000 shares). We see this pattern of insider buying as a bullish signal. It suggests that these insiders are genuinely confident that the company can turn things around and that they believe the stock is currently undervalued.

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