If a CEO is loading up on 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 companies and their stock purchases can provide valuable trading signals.
In this report, we are going to highlight a large CEO stock purchase at Hugo Boss AG (BOSS:GR). Hugo Boss is a global fashion and lifestyle company that sells clothing, footwear, accessories, and fragrances. Operating in over 100 countries worldwide, it has two main brands – HUGO and BOSS. The company is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €4.14 billion.
Insider Buying at Hugo Boss
2iQ data shows that on January 4, CEO Daniel Grieder purchased 18,000 BOSS shares at a price of €55.93 per share. This trade cost the insider just over €1 million and increased his holding to 99,000 shares.
Mr. Grieder has considerable experience in the fashion industry. Before joining Hugo Boss in June 2021, he spent over a decade at Tommy Hilfiger where he served in a number of top roles including CEO, COO, and President. Earlier in his career, he founded Madison Clothing, which distributed internationally renowned brands such as Pepe Jeans, Tommy Hilfiger, and Stone Island. Given his background, he is likely to have a good understanding of Hugo Boss’ prospects.
What stands out here is the size of Mr. Grieder’s purchase. The fact that he has invested over €1 million in stock and increased the size of his holding by over 20%. This insider trading statistic suggests that he is very confident the stock is set to move higher.
Hugo Boss’ Q3 results showed that the company has momentum right now.
For the period, currency-adjusted group sales increased by 18% (+27% compared to 2019 levels) to €933 million. This represented the highest quarterly sales figure in the company’s history. Operating profit was up 8% to €92 million, despite ongoing brand and product investments.
On the back of these results, the company raised its full-year 2022 guidance. It expects sales for 2022 to increase between 25% and 30% and EBIT to increase between 35% and 45%.
Since the Q3 results, analysts at Baader Helvea have upgraded the stock to "add" from "reduce" citing a stabilization of the EU consumer confidence index and the company's ability to handle headwinds.
In light of these developments, we see the legal insider trading activity here as a bullish signal.