If a CEO is investing millions in company stock, investors should take note. CEOs tend to be way ahead of analysts and portfolio managers when it comes to the performance of their businesses, and their stock purchases can provide valuable trading signals.
In this report, we are going to highlight a large CEO purchase at Evolution AB (EVO:SS). Evolution is a Swedish company that develops B2B online casino solutions for gaming operators. Its partners include 888 Casino, Betfair, Draft Kings, William Hill, and Paddy Power. The company is listed on the Stockholm Stock Exchange and currently has a market cap of SEK 197 billion.
Insider buying at Evolution AB
Our data shows that on September 23, CEO Martin Carlesund purchased 126,000 EVO shares at a price of SEK 797.91 per share. This trade cost the insider SEK 100.5 million (approx. $8.9 million) and increased his holding to 584,923 shares.
This trading activity is worth highlighting for a couple of reasons.
Firstly, Mr. Carlesund – who has served as CEO since 2015 – has a financial background. He holds an MSc in finance and is currently Chairman of Carlesund Investments & Consulting AB. Given his background, he is likely to have a good understanding of the company’s intrinsic value.
Secondly, on the day that Mr. Carlesund purchased stock, Chief Product Officer Todd Haushalter also picked up 4,000 shares at a price of SEK 783 per share. So, Mr. Carlesund is not the only insider that sees a buying opportunity right now.
Evolution's recent Q2 results showed that the company has momentum right now.
For the period, operating revenues increased by 34.0% to €344.0 million. Meanwhile, EBITDA increased by 36.4% to €238.2 million, corresponding to a margin of 69.3% versus 68.0% a year earlier. Earnings per share came in at €0.94, compared to €0.68 a year earlier.
During the quarter, the group added close to 1,000 employees, showing the speed it is moving at. It also announced the acquisition of one of the leading and most innovative slots creators – Nolimit City. It believes this acquisition – expected to be completed in Q3 – will increase the gap between itself and its competitors.
In light of this momentum within the business, we see the insider buying here as a bullish indicator.