Insider transactions can give investors a more complete view of activity within the world’s publicly traded companies. No one has more information in relation to a company’s performance and prospects than its leaders.
In this report, we are going to highlight a large insider purchase at Airbus SE (AIR:FP). Airbus is a European aerospace company that operates in both the civil and military aerospace industries. Operating globally, the company designs and manufactures commercial aircraft, helicopters, military transports, satellites, and launch vehicles. It also provides data services, navigation, secure communications, urban mobility, and other solutions for customers on a global scale. The company is listed on the Euronext Paris stock exchange and currently has a market capitalization of €77 billion.
Airbus: Insider Buying
Our insider transaction data shows that on 5 May, Airbus’ CEO Guillaume Faury bought 2,200 AIR shares at a price of €97.58 per share. This purchase cost the insider approximately €215,000.
An Experienced Insider
Mr. Faury is an experienced insider. Prior to being appointed CEO of Airbus in April 2019, he was President of Airbus’ Commercial Aircraft business and Chief Executive Officer of Airbus Helicopters between 2013 and 2018. His achievements included restructuring manufacturing systems and introducing new technologies. Meanwhile, between 1998 and 2008, he held various leadership positions in the helicopter business. This experience means he is likely to have a good understanding of the company’s future prospects.
It’s worth noting that this recent purchase – his largest since mid-2019 – has increased the size of his holding by 10%. This suggests he is confident the stock is set to move higher.
Airbus’ recent first-quarter results beat expectations. For the quarter, consolidated revenues were broadly stable year-on-year at €10.5 billion (Q1 2020: €10.6 billion). Meanwhile, consolidated EBIT Adjusted – a key indicator capturing the underlying business margin – increased to €694 million (Q1 2020: € 281 million). Consolidated free cash flow before M&A and customer financing amounted to €1,202 million, compared to negative free cash flow of €8,030 million in Q1 2020, driven by a strong positive phasing impact from working capital and continued cash containment efforts.
Since these results, a number of brokers have lifted their price targets for the stock. Those who have increased their price targets include Barclays (raised to €113 from €110), Deutsche Bank (raised €109 from €105), and SocGen (raises to €104 from €76).
In light of this Q1 performance, we see the insider buying here as bullish.