12-month performance: -55% Insider activity: Bullish Buying pattern: Large purchases from Chairman Recent news: Issued half-year results
Elior Group is a French multinational catering and support services company. The group operates in the US, the UK, and Europe, and generated revenues of €4.9 billion in FY2019. It is listed on the Euronext - Paris and currently has a market capitalisation of €925 million.
Year to date, Elior shares are down about 60%. The reason for this is that, like most companies that operate in the hospitality industry, Elior has been impacted significantly by the coronavirus. For the first half of FY2020, revenue was down 6.2% on an organic basis, while adjusted EBITA was down 57%. Looking ahead, the company said it expects activity in the sector to pick up in the second half of the year, however, it expects the recovery to be gradual.
Source: 2iQ Research
What has caught our attention here is the fact that Chairman, Gilles Cojan, has recently increased his personal holding in Elior significantly. On 30 June, the insider purchased 38,000 shares at a price of €5.05 per share, and then on 1 July, he followed this up with another purchase of 100,000 shares at a price of €4.95 per share. These two purchases – which cost the insider nearly €700,000 in total – increased his holding from 18,000 shares to 156,000 shares. We see this buying activity from the Chairman as a bullish signal. It suggests he’s confident that the sector will pick up and that he believes the stock is currently undervalued.
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