Insider Buying

Director dealing: Wizz Air’s Chairman just bought £1.9 million worth of stock

Wizz Air Holdings PLC
(WIZZ:LN)
12 months:
-54.74%
Activity:
Bullish
Pattern:
Purchase from Chairman
News:
Q1 results
Wizz Air Holdings PLC
(WIZZ:LN)
12 months:
-54.74%
Activity:
Bullish
Pattern:
Purchase from Chairman
News:
Q1 results

Top-level corporate insiders tend to have an excellent understanding of their companies’ operating activities. If these individuals are buying company stock, it’s often a sign that the outlook for the stock is attractive.

In this report, we are going to highlight some buying activity from a top-level insider at Wizz Air Holdings PLC (WIZZ:LN). Wizz Air is a low-cost airline that operates predominantly in Europe. The company, which operates a fleet of over 150 Airbus A320 planes, currently offers around 1,100 routes across roughly 50 countries. It is listed on the London Stock Exchange and has a market cap of £2.3 billion at present.

Director dealing at Wizz Air

Our data shows that on July 22 and July 27, two insiders have purchased Wizz Air stock. Those who have bought shares include:

  • Chairman William Franke (100,000 shares @ £19.01 per share)
  • Board member Andrew S. Broderick (3,075 shares @ £21.65 per share)

Combined, the two insiders have spent approximately £1.96 million on Wizz Air stock.

Airline expert

This trading activity is worth highlighting for a couple of reasons.

Firstly, Mr. Franke has nearly doubled his holding with this trade. The fact that the insider has spent almost £2 million on shares and upped his stake by such a large percentage suggests that he is very confident the stock is undervalued right now.

It’s worth noting here that Mr. Franke has considerable experience in the airline industry. He is the founder and Managing Partner of Indigo Partners LLC, a private equity fund focused on air transportation. Previously, he was Chairman and CEO of America West Airlines from 1993 to 2001. He has served as Chairman of Wizz Air since 2004 so he is likely to have a good read on the company, and its prospects.

Secondly, Mr. Franke is not the only insider to buy stock here recently. Our data shows that in July, four other insiders, including President Robert Carey, made smaller stock purchases. This tells us that those within the company are in agreement that the stock offers value at the moment.

Signs of normalization

Wizz Air has experienced a number of challenges over the last year. Not only has the company had to contend with Covid-19 restrictions, but it has also had to deal with disruptions at European airports, higher fuel costs, and uncertainty from the Russia-Ukraine war. This combination of issues has led to large losses, with the group reporting an operating loss of €285 million (versus a loss of €109 million a year earlier) in its last quarter.

There are signs, however, that the outlook could be improving. In its Q1 update, posted on July 27, the company advised that levels of disruption at airports had started to normalize. It also said that it expects to deliver a “material” operating profit as revenue and pricing momentum continues to improve. The company noted that in Q2, it expects revenue per available seat kilometer to improve 10% versus the same quarter three years ago.

In light of these developments, and the fact that the stock has lost more than 50% of its value over the last 12 months, we see the insider buying here as a bullish indicator.

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