Insider Buying

Insider buying: OMV AG CEO makes large stock purchase

OMV AG
OMV:AV
12 months:
-2%
Activity:
Bullish
Pattern:
Large purchase by CEO/Chairman
News:
Q2 results
OMV AG
OMV:AV
12 months:
-2%
Activity:
Bullish
Pattern:
Large purchase by CEO/Chairman
News:
Q2 results
Insider buying OMV AG CEO makes large stock purchase

If a CEO is buying company stock, it’s often worth investigating the stock further. CEOs tend to have an intimate understanding of their businesses and are usually way ahead of analysts and portfolio managers when it comes to revenue and earnings trends.

Here, we are going to highlight a large CEO purchase at OMV AG (OMG:AV). OMV is an Austrian multinational energy company that produces and markets oil, gas, and petrochemicals. The company has oil fields or is prospecting for oil in Central and Eastern Europe, the North Sea, the Middle East, and Africa. It’s traded on the Vienna Stock Exchange and currently has a market capitalization of €13.1 billion.

Insider Buying at OMV AG

Our insider transaction data shows that on August 1, OMV’s CEO and Chairman Alfred Stern purchased 14,200 shares at a price of €42.19 per share. This trade cost the insider approximately €600,000 and increased his holding to 20,775 shares.

Chart shows OMV AG price history with major buy events highlighted

High-conviction trade

This trading activity is worth highlighting for a couple of reasons. Firstly, it has increased the size of the insider’s position significantly. The fact that Mr. Stern has upped his stake by over 200% indicates that he is very confident the stock is set to rise.

Secondly, Mr. Stern is not the only insider that has picked up stock recently. In late July, we observed a purchase of 2,000 shares from board member Mr. Renard – who was a Founding Partner of ZPR Consulting, which offers expert advice to the energy sector. Several other insiders have also made smaller purchases recently.

Higher prices drive revenue growth

OMV had a strong Q2 in which revenues were up significantly year on year.

Consolidated sales revenues were 104% higher than Q2 2021 at €14.79 billion. Meanwhile, the clean operating result of €2.937 billion was €1.638 billion higher than the figure achieved a year before. This was driven by Exploration & Production which grew from €512 million in Q2 last year to €1.617 billion in Q2 2022 aftermarket prices rose significantly. Net debt excluding leases fell significantly to €3.113 billion from €7.148 billion a year ago.

The second quarter of 2022 proved to be an exceptional one for OMV in terms of earnings. Brent prices continued to rally in the second quarter, averaging 114 dollars per barrel, which is 65 percent higher year on year,” commented Mr. Stern.

The company noted in its Q2 results that its Baystar joint venture in Texas had recently started commercial operations at the new ethane cracker. This has an annual production capacity of one million tons of ethylene and is an important milestone in its growth strategy.

Given these excellent results, we see the recent insider buying at OMV as bullish.

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