EQT AB (EQT:SS)
12-month performance: N/A
Insider activity: Bullish
Insider buying pattern: Large purchases from management holding company
Recent news: Poor H1 results
Insider buying can offer clues in relation to a stock’s future direction. Insiders sell company stock for many reasons. But they only buy stock for one reason – they expect it to go up.
In this article, we are going to highlight some interesting insider buying at EQT AB (EQT:SS). EQT is a Swedish investment company that manages a range of specialized funds and investment vehicles. It is listed on the OMX Nordic Exchange Stockholm and currently has a market capitalization of SEK 154 billion.
EQT: insider buying
What has caught our attention here is a series of large purchases from Bark Partners AB this month. Records show that between 4 September and 8 September, Bark Partners purchased 925,000 EQT shares, spending a total of around SEK 151 million (approx $17.2 million) on EQT stock.
Source: 2iQ Research
These purchases look interesting for a couple of reasons. Firstly, what we have here is buying from some top-level insiders. Bark Partners is a holding company owned by four EQT partners including Chairman of the Board Conni Jonsson. These partners transferred the majority of their shares into the company last year becoming the second-largest shareholder in EQT.
Secondly, these are large purchases. The purchases represent the largest amount of insider buying within a week since the company’s IPO last September. This suggests that insiders are confident about the future.
Share price fallEQT shares have fallen from around SEK 200 to around SEK 160 recently on the back of the company’s H1 results, which were issued on 20 August. The results were below-par due to Covid-19, with adjusted EBITDA falling to €80 million from €133 million a year earlier. The group advised that, due to the pandemic, exit activities have been significantly slower with the majority of the exit pipeline anticipated to be executed beyond 2020.
The insider buying we have observed recently indicates that insiders expect the stock to bounce back. We see this pattern of buying as a bullish signal.