Insider Buying

2iQ Insider Brief: BT GROUP (BT.A:LN)

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BT Group (BT/A:LN)

12-month performance: -43%
Insider activity: Bullish
Buying pattern: Purchases from multiple directors
Recent news: Broker price target downgrades

BT Group is a UK-based telecommunications company. The group is the largest provider of fixed-line voice and broadband services in the UK as well as the largest mobile network operator. The company is listed on the London Stock Exchange and currently has a market capitalisation of £11.0 billion.

Investor sentiment towards BT Group shares is weak at the moment. This is illustrated by the fact that since the company issued its full-year results on 7 May, a number of brokers, including Barclays, Citigroup, Jefferies, and Credit Suisse, have reduced their target prices for the FTSE 100 stock. Of the 19 brokers that currently cover BT Group, 10 have the stock as either a ‘sell’ or a ‘hold.’
What we think is interesting here is that in June, three independent non-executive directors purchased BT shares, spending a total of £140,000 on stock. This comes after four members of the board, including Chairman Jan Du Plessis and CEO Philip Jansen, made large purchases in mid-May. This means that seven members of the board have purchased BT shares in the space of less than two months. We see this pattern of ‘cluster buying’ – where multiple insiders are buying within a short space of time – as a bullish signal. It suggests that the outlook for the company may not be as bad as some investors fear.