Insiders have access to real-time information on their companies and often also have a wealth of experience that help them evaluate their firms’ prospects. If they are buying company stock, it’s generally worth taking a closer look.
In this report, we are going to highlight some interesting insider buying at Alpha FX Group PLC (AFX:LN). Alpha FX is a British financial services company that offers FX risk management and payments solutions. Operating in over 30 countries worldwide, it currently serves more than 600 organizations. The company is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and has a market capitalization of £759.5 million at present.
Director dealing at Alpha FX
Our data shows that on September 13, board member Lisa Gordon purchased 5,665 AFX shares at a price of £18.00 per share. This trade cost the insider approximately £102,000 and increased her holding to 25,665 shares.
Ms. Gordon has considerable experience in the investment world. Earlier in her career she worked as an equity investment analyst at County NatWest Securities. Currently, she serves as Chair of Cenkos Securities, an institutional stockbroking firm, and also serves as an adviser to a private equity firm. Given her background, it’s fair to assume that she had a good understanding of the stock’s intrinsic value.
What stands out here is that Ms. Gordon has increased the size of holding by nearly 30% with this trade. The fact that the insider has upped her stake by such a large percentage suggests that she is very confident the stock will perform well going forward.
Alpha FX’s recent half-year report showed that the company continues to grow at a rapid clip.
For the six-month period ended June 30, 2022, group revenue amounted to £46.1 million, up 35% year on year, with revenue in the Alternative Banking Solutions segment up 47% to £13.9 million. Underlying profit before tax came in at £18.0 million, up 16% year on year.
On the back of these results, the group lifted its interim dividend by 13.3% to 3.4p per share.
In terms of the outlook, management said that trading across both FX Risk Management and Alternative Banking Solutions has remained strong, and that it expects to comfortably meet expectations on revenue and profit for FY2022. It added that it will continue to invest for growth in H2.
“Although much of the world is moving into a challenging macro environment, I have never felt more confident about the potential of the business and our long-term growth prospects. Our highly decentralized structure has helped us to evolve our business model and strategy in a way that is delivering significant competitive advantage and momentum whilst giving us the clarity and confidence to increase the rate at which we are investing for long-term growth. I am therefore confident we are in a strong position to sustain our company's growth and returns in the long term, whilst continuing to deliver strong performance in the short term," said CEO Morgan Tillbrook.
In light of these results, and the confident tone from the CEO, we see the insider buying here as a bullish indicator.