One of the most bullish insider transaction patterns is ‘cluster buying’. This is where three or more insiders have purchased company stock within a short period of time.
In this report, we are going to highlight some recent cluster buying at Alpha FX Group PLC (AFX:LN). Alpha FX is a British financial services company that is focused on FX risk management and payments solutions. Operating in over 30 countries worldwide, it serves more than 600 organizations. The company is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and currently has a market capitalization of £820.7 million.
Alpha FX: Insider Buying
Our insider transaction data shows that on March 16, three insiders at Alpha FX snapped up stock. Those who bought shares were:
- Chairman Clive Kahn (7,933 shares @ £17.50 per share)
- Non-Executive Director Lisa Gordon (4,715 shares @ £17.30 per share)
- Independent Director Vijay Thakrar (1,152 shares @ 17.33 per share)
In total, the three insiders spent around £240,000 on stock.
This cluster of insider purchases is worth highlighting for a couple of reasons.
Firstly, the insiders have spent a substantial amount of money on AFX stock. Our records show that these purchases represent the largest amount of insider buying at Alpha FX within a quarter since the company went public in 2017.
Secondly, all three of the insiders have significant experience in the business world. It’s worth noting that Mr. Khan has over 30 years of experience in financial services and has considerable experience in FX and payments. Currently, he is CEO of Payzone UK Ltd, a payments solutions business. Previously, he was CEO of global FX firm Travelex. This background means that he is likely to have an excellent understanding of Alpha FX’s prospects.
Alpha FX recently posted a very strong set of results for the year ended December 31, 2021.
For the period, group revenue was up 68% year on year to £77.5 million. Meanwhile, underlying profit was up 91% to £33.4 million.
On the back of these results, the group declared a final dividend of 8.0p per share, taking the total dividend for the year to 11.0p per share. That represents an increase of 37.5% year on year.
As for the outlook, management was very confident that the company can continue to grow. “Looking forward, we see major opportunities across all our businesses. We continue to take share in UK FX Risk Management and are well on the way to replicating that UK success in overseas markets,” commented CEO Morgan Tilbrook. “We look forward to 2022 with confidence,” he added.
In light of the strong growth here, and the confidence from management, we see the insider buying as a bullish indicator.