Insider transaction activity can power your investment analysis. Corporate insiders are some of the most informed participants in the market and research shows that their trading activity can be an excellent predictor of future stock performance.
In this report, we are going to highlight some interesting insider buying at Activision Blizzard Inc (ATVI:US). Activision Blizzard is one of the biggest players in the video gaming industry. Its games, which are well-known globally, include Call of Duty, World of Warcraft, and Candy Crush. The company is listed on the NASDAQ Global Select Market and currently has a market capitalization of $72 billion.
Activision Blizzard: Insider Buying
Our insider transaction data shows that between 6 May and 12 May, board member Peter Nolan purchased 22,000 ATVI at an average price of $94.95 per share. His purchases, which cost a total of more than $2 million, increased the size of his holding by 40% to 76,792 shares.
This insider trading activity is worth highlighting for a couple of reasons. Firstly, Mr. Nolan has spent a substantial sum of money on stock and increased the size of his holding significantly. This suggests he is very confident ATVI stock is set to move higher.
Secondly, Mr. Nolan – who has been a director of Activision Blizzard since October 2013 – has a financial background. Previously, he was the managing partner at the private equity group Leonard Green & Partners. Before this, he served as a managing director and the co-head of Donaldson, Lufkin, and Jenrette’s Los Angeles investment banking division. Given this experience, it’s fair to assume that he knows what he’s doing here.
Strong Q1 Results
Activision Blizzard’s most recent quarterly results, for the quarter ended 31 March, were strong. For the period, net bookings were $2.07 billion, as compared with $1.52 billion for the first quarter of 2020. Meanwhile, operating cash flow was $844 million, as compared with $148 million for the first quarter of 2020. Non-GAAP earnings per share came in at $0.98, up from $0.76 in the same period in 2020.
As a result of this performance, the group raised its outlook for 2021. It now expects net bookings of $8.60 billion for the year, up from previous guidance of $8.45 billion. Before the results, analysts were expecting full-year revenue of $8.55 billion.
“Our employees continue to demonstrate exceptional performance under challenging circumstances,” said CEO Bobby Kotick. “That relentless drive across our franchises produced strong first quarter results that were well ahead of expectations. Our continued overperformance enables us to raise our outlook for the full year,” he added.
In light of these strong results and the increase in guidance, we see the insider buying here as bullish.