There are two main reasons that insiders invest in their own companies. They either believe that business is about to get better, or that the company is undervalued. Whatever the reason, insider buying tells us that those within the company expect the company’s share price to rise.
In this report, we are going to highlight some interesting insider buying at Adapteo Oyj (ADAPT:SS). Adapteo is a Finnish company that specializes in adaptable buildings. Its buildings are based on a modular and circular construction concept and can be adapted when user needs change. The company is listed on the OMX Nordic Exchange Stockholm and currently has a market capitalization of SEK 2.5 billion.
Adapteo: Insider Buying
Our records show that on 15 February, Adapteo’s Chairman Peter Nilsson bought 17,426 ADAPT shares at a price of SEK 88.35 per share. Then on 19 February, he bought 12,000 shares at a price of SEK 89.74. These transactions cost the insider SEK 2.62 million (approx $316,000).
This insider transaction is worth highlighting for a couple of reasons. Firstly, it is a substantial purchase in nominal terms. Our data shows that it is the second largest insider purchase at Adapteo in the last two years.
Secondly, it is also a large purchase in relative terms. Our data shows that it has increased the size of Nilsson’s holding by 19%. This suggests he is confident the stock is going to move higher.
Positioned For Profitable Growth
Adapteo posted an encouraging set of fourth-quarter results in mid-February.
For the quarter, net sales amounted to €65.3 million, up 29% at constant currency, while earnings per share came in at €0.13 versus a loss per share of €0.17 in Q4 2019.
For the year, net sales and EPS came in at €231.4 million and €0.42 respectively, up from €216.2 million and €0.19 in the year before.
As a result of this performance, the company proposed a dividend of €0.12 (up from €0.00 the year before).
Looking ahead, the company said that with its operational efficiency, financial stability, upgraded portfolio, and larger geographic footprint, it is positioned for profitable growth.
In light of these results, and the dividend hike, we see the insider buying here as bullish.