If a top-level insider is buying company stock, investors should take note. These insiders are often way ahead of analysts 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 stock purchase from a top-level insider at Deutz AG (DEZ:GR). Deutz is an independent provider of diesel, gas, and electric engines that is based in Germany. The world’s oldest engine company, it makes engines for a broad range of markets including the agriculture, construction, and automotive industries. The company is listed on Deutsche Börse’s Xetra and currently has a market capitalization of approximately €650.84 million.

Insider Buying at Deutz

2iQ data shows that on January 31, Deutz’s Chairman of the Management Board Dr. Sebastian Schulte purchased 20,000 DEZ shares at a price of €4.98 per share. This trade cost the insider €99,600 and increased his holding to 65,000 shares.

Financial Background

Dr. Schulte has a financial background. Previously, he worked in the areas of mergers & acquisitions and investment controlling at ThyssenKrupp AG. He also served as CFO of ThyssenKrupp Marine Systems. Before joining ThyssenKrupp, he obtained a Doctorate in Finance & Accounting from the University of Cambridge. Given his background, he is likely to have a good understanding of Deutz’s investment potential.

What stands out here is that Dr. Schulte has increased the size of his holding by 44%. This suggests that he is very confident the stock is set to move higher.

Solid Performance

Deutz’s most recent results, for the first nine months of 2022, were solid.

For the nine-month period, revenue amounted to €1,395.8 million, up 19% year on year. Meanwhile, group unit sales came in at 169,352, up 16.5% year on year.

Encouragingly, profitability levels were up significantly year on year. For the period, adjusted EBIT came in at €65.9 million versus €30.9 million a year earlier, while net income before exceptional items improved by 94.8% to €52.2 million.

Looking ahead, management was optimistic that the company can continue to perform well.

“Our orders on hand stood at the very high level of approximately €830 million at the end of September. That provides a stable starting position for the coming months. Market demand remains particularly strong for engines with a capacity of less than four liters,” said Dr. Schulte.

In light of these solid results, we see the insider buying here as a bullish signal.

Back to Overview