12-month performance: +42% Insider activity: Bullish Insider buying pattern: Purchase from CEO Recent news: Good Q2 results
A CEO has deeper insight into their own company’s operations than any outside analyst could ever hope to obtain. If they’re buying stock, it’s worth taking note.
Here, we are going to highlight a recent CEO purchase at Gerresheimer Group (GXI:GR). Gerresheimer is a German company that manufactures products for the administration of medicines such as insulin pens, inhalers, prefillable syringes, and injection vials. It is listed on the XETRA and currently has a market capitalization of €3.1 billion.
Gerresheimer: insider buying
On 8 September, Gerresheimer’s CEO Dietmar Siemssen purchased 1,000 GXI shares. The insider paid a price of €93 per share meaning that the total cost of the transaction was €93,000. This purchase lifted his holding from 10,400 shares to 11,400 shares – an increase of 9.6%.
Source: 2iQ Research
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What’s interesting is that Siemssen has a solid track record when it comes to timing his purchases. After the insider last purchased GXI shares, on 19 February 2020, the stock rose approximately 40% over the next six months. Similarly, after he purchased GXI shares on 20 February 2019, the stock rose around 10% over the next month. This suggests that Gerresheimer stock could be worth a closer look right now.
€115 price target
Looking at recent news surrounding Gerresheimer, the outlook for the stock appears to be favorable. In July, the company advised that it is currently seeing strong demand for its products from many pharma companies – in particular for injection vials for future vaccination campaigns against Covid-19 – and that “new opportunities” in the pharmaceutical space are opening up for the group. The company added that it will be very well prepared to support the vaccination campaigns. In late July, analysts at Berenberg raised their target price from €75 to €115 – about 17% higher than the current share price.
All things considered, we see this insider buying as a bullish signal. It indicates that the CEO is confident about the future and that he sees Gerresheimer stock as undervalued.
Disclaimer: Neither 2iQ Research GmbH nor its content providers are responsible for any damages or losses arising from any use of this information.
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