If a CEO is buying company stock, it’s often worth taking a closer look. CEOs tend to be way ahead of analysts and portfolio managers when it comes to the performance of their companies and their stock purchases can provide valuable trading signals.
In this report, we are going to highlight a large CEO purchase at FD Technologies PLC (FDP:LN). FD Technologies is a British technology company that specializes in big data solutions. Its solutions, which include real-time streaming analytics platform KX, are used by customers across a wide range of industries including financial services, energy, and healthcare. The company is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and currently has a market capitalization of £419 million.
Insider buying at FD Technologies
Our data shows that on October 28, CEO Seamus Keating purchased 7,504 FDP shares at a price of £12.90 per share. This trade cost the insider £96,802 and increased his holding to 38,518 shares.
24% increase in holding
Mr. Keating has considerable company and industry experience. He was appointed as CEO of FD Technologies in January 2020. However, before this, he served as Non-Executive Chairman for around six and half years. Earlier in his career, he worked at multinational IT and management consultancy company Logica PLC, where he was CFO and COO.
What stands out here is that the CEO has increased the size of his holding by 24% with this purchase of stock. This suggests that he is confident the stock is set to move higher.
Good H1 results
FD Technologies recently posted a solid set of results for the six months to August 31, 2022.
For the period, the group registered:
- Revenue of £147.4 million, up 15% year on year.
- Annual recurring revenue (ARR) growth of 41% and annual contract value signed of £11.4 million, surpassing FY2022 (£9.8 million).
- Net revenue retention (NRR) of 119% (H1 FY2022: 102%), showing that customers are increasing their use of KX.
- Adjusted diluted earnings per share of 14.2p, up 21% year on year.
- 51 subscription deals signed (H1 FY2022: 41), of which 21 were for KX Insights (H1 FY2022: 6), its cloud-first integrated data management and real-time analytics platform.
On the back of these good results, the company increased its full-year FY2023 revenue guidance to at least £300 million.
“The Group has enjoyed a strong H1, growing revenue and profitability and laying the foundations for accelerated growth from here. In KX the momentum we have built since the launch of KX Insights is delivering results, as evidenced by the 41% growth in annual recurring revenue,” said Mr. Keating. “We are very well placed to continue to create value, with major growth opportunities ahead,” he added.
In light of these good results, we see the insider buying here as a bullish indicator.