Aksa Akrilik Kimya Sanayii A.Ş (AKSA:TI)
12-month performance: +52%
Insider activity: Bullish
Insider buying pattern: Purchases from CEO and major shareholder
Recent news: Issued H1 results
Insider buying can provide investors with clues in relation to a stock’s future direction. Insiders sell company stock for many reasons. But they only buy stock for one reason – they expect it to go up.
In this report, we are going to flag some interesting insider buying at Aksa Akrilik Kimya Sanayii A.Ş (AKSA:TI). Aksa is the world’s largest producer of acrylic fiber with a capacity of 330,000 tons per year. It is listed on the Istanbul Stock Exchange and currently has a market capitalization of TRY 2.6 billion.
Aksa: insider buying
What has caught our attention here is two large insider purchases in mid-October. Our records show that on 15 October, General Manager Cengiz Tas purchased 150,000 Aksa shares at a price of TRY 7.86. Then, on 16 October, board member Izer Lodrik purchased 88,300 shares at a price of TRY 7.92 per share through his company Emniyet Ticaret.
This insider buying activity is significant for several reasons. Firstly, the insider purchases are quite large. Combined, they represent the largest amount of insider buying at Aksa in over two years.
Secondly, these are top-level insiders that have purchased stock. Cengiz Tas has been General Manager since 2011, so he is likely to have an excellent understanding of the company and its operations. Mr. Tas is also the Vice President of the Turkish Textile Industry Employer’s Union, as well as a board member. Meanwhile, Emniyet Ticaret is a major shareholder of Aksa, meaning Izer Lodrik is also likely to have a good understanding of the company.
Increasing demandAksa issued a disappointing set of first-half results in August. Due to Covid-19-related manufacturing and sales disruptions, revenue for the period fell to TRY 1.60 billion, down from TRY 1.87 billion in the same period last year. Meanwhile, profit from continuing operations fell to TRY 50.76 million from 183.07 million last year.
However, the company said that as of 26 June 2020, manufacturing capacity was gradually increased to regular operating levels due to increasing demand. The company also stated that it had assessed the possible impacts of the Covid-19 pandemic on its financial assets, inventories, tangible assets, goodwill and investment properties and had identified no impairments.
In light of these developments, we see the insider buying here as a bullish signal. Insiders at Aksa are clearly confident about the future.