Hermes International SCA (RMS: FP)
12-month performance: +19%
Insider activity: Bullish
Buying pattern: Large purchase from management holding company
Recent news: Outperformed rivals in Q1
Hermes International is a French luxury goods manufacturer. Operating over 300 high-end stores globally, the company sells leather goods, clothing, scarves, home furnishings, perfume, watches, and jewellery. It is listed on the Euronext - Paris and currently has a market capitalisation of €79 billion.
Hermes’ sales took a hit in the first-quarter as the coronavirus outbreak forced the company to close stores. For the first three months of the year, sales fell 7.7%. However, this decline in sales was not as bad as those reported by rival luxury goods manufacturers such as LVMH, Kering, and Moncler, which all reported sales declines of 15% or more in the first quarter. After the Q1 results, analysts at Bryan Garnier said that Hermes is more resilient than its peers, while analysts at Midcap Partners said that Hermes remains "best-in-class" in the luxury sector.
What looks interesting to us about Hermes International is that on 12 June, management holding company H51 purchased 25,000 RMS shares at a price of €702.16 per share, spending a total of €17.6 million on stock. H51 is a holding company set up by the family behind Hermes, designed to help keep Hermes independent. Its board of directors consists of a number of Hermes insiders. We see this large purchase from H51 as a bullish signal. It suggests that the family behind Hermes is confident about the future.