Insiders tend to be value investors. If they’re buying company stock, it’s usually because they believe the stock is undervalued.
Here, we are going to look at recent insider buying at APi Group Corp (APG:US). APi Group is a global business services provider that operates in over 20 countries worldwide. The business is divided into two divisions, Safety Services and Specialty Services, and these divisions provide services to clients in a range of industries including construction and oil and gas. It’s traded on the New York Stock Exchange and currently has a market capitalization of $3.52 billion.
API Group Corp: Insider Buying
Our insider transaction data shows that on June 17, a director at APi Group, Anthony Malkin, purchased 37,800 APG shares at a price of $14.47 per share. This cost the director about $550,000 and increased his holding in the company by about 150%.
The recent insider buying at APi Group caught our attention for a couple of reasons.
First, Mr. Malkin has extensive industry experience. He has been Chairman and CEO of Empire State Realty Trust for close to ten years and has considerable knowledge in relation to safety services and existing building energy efficient retrofits. He has been a director at API Group for a little under four years now and is likely to understand the business well.
Secondly, the director has increased his holding by a significant amount and spent over $500,000 on API Group’s stock. This suggests he is confident that the share price is not being valued correctly by investors.
APi Group saw strong revenue growth in the first quarter, and at the end of March its consolidated backlog stood at record levels.
During Q1, the company saw positive momentum throughout the whole of the business. Reported net revenues for the period increased 83.2% to $1.5 billion versus a year ago when net revenues came in at $803 million. Acquisitions in Safety Services helped drive this figure as well as strong organic revenue growth in both divisions.
Adjusted EBITDA of $128 million was just over double the $61 million achieved in Q1 2021 and the adjusted EBITDA margin of 8.7% was over 1% higher than a year prior. The reported net loss of $7 million was an improvement on the $8 million loss made in the first quarter of 2021 but inflation and supply disruption did have an impact on profits.
“Overall, I am pleased with the forward progress of all of our businesses and what has been achieved in the first quarter. We feel good about the momentum we have across the board and the outlook for the balance of this year and the years ahead,” said Russ Becker, APi’s President and CEO.
Having looked through these positive Q1 figures, we see the recent insider buying at APi Group as a bullish event.