Insider Buying

2iQ Insider Brief: BOUYGUES SA (EN: FP)

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Bouygues SA (EN: FP)

12-month performance: +3%
Insider activity: Bullish
Buying pattern: Purchases from family holding company
Recent news: Poor Q1 results

Bouygues is a French company that operates in the construction, media, and telecom industries. The group has operations in over 90 countries, and employs over 130,000 people in total. It is listed on the Euronext - Paris and currently has a market capitalisation of €12.5 billion.

Bouygues issued a disappointing Q1 trading update in mid-May. For the quarter, the group posted an operating loss of €242 million on a 9% drop in Q1 sales. The group said the decline in sales in the first quarter due to Covid-19 was around €750 million, of which €600 million was in France. However, the outlook could be improving. Recently, analysts at JP Morgan upgraded Bouygues to ‘overweight’ from ‘neutral’, stating that the stock could be boosted by near-term no-frills mobile price hikes, possible help from the French government for the construction sector, and a potential $1 trillion infrastructure plan in the US.

EN-FP--chart     Source: 2iQ Research

What stands out to us here is the fact that in late June and early July, SCDM SAS purchased 1,150,000 Bouygues shares, spending a total of €34.5 million on stock. SCDM is a holding company controlled by Bouygues Chairman and CEO Martin Bouygues and Deputy CEO Olivier Bouygues which owns over 20% of Bouygues stock. We see this buying activity from SCDM as a bullish signal. It suggests that top-level insiders are confident about the future and that they expect the stock to rise.

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