CEOs tend to have a deep level of insight into their companies’ operations. If they’re buying company stock, it’s generally a sign that business performance is strong and that the outlook for the stock is positive.
In this report, we are going to highlight a CEO purchase at Arjo AB (ARJOB:SS). Arjo is a Swedish medical technology company that supplies products, services, and solutions for people with reduced mobility and age-related health challenges. Its products, which include medical beds, patient handling devices, and early mobility solutions, are sold in more than 100 countries worldwide. The company is listed on the OMX Nordic Exchange Stockholm and currently has a market capitalization of SEK 36.7 billion.
Arjo AB: Insider Buying
Our insider transaction data shows that on 8 September, CEO and President Joacim Lindoff bought 8,418 ARJOB shares at a price of SEK 107.50 per share. This trade cost the insider SEK 905,000 (approx. $105,000).
This trade from Mr. Lindoff is worth highlighting for a number of reasons. Firstly, it is large in nominal terms. Our records show that it is the second-largest insider purchase at Arjo in the last two years.
Secondly, it has increased the size of the insider’s holding by 25%. This is a significant increase, which suggests that the insider is quite confident the stock is set to move higher.
Third, Mr. Lindoff – who has substantial experience in the medical technology field and was previously Chairman of the Board of the Swedish Medtech industry organization – has made well-timed purchases in the recent past. In February, for example, he bought stock when it was trading at SEK 60. Since then, it has risen to SEK 116.
Arjo posted a solid set of Q2 results in July.
For the period, adjusted EBITDA increased 4.9% to SEK 513 million while adjusted operating profit was up 12.8% to SEK 275 million. In comparable currencies, profit was SEK 295 million, corresponding to an improvement of about 21%. Earnings per share came in at SEK 0.70 versus SEK 0.42 in Q2 2020.
The group noted that it was seeing a continued recovery within profitable categories such as patient handling, service and DVT and that its newly-launched SEM scanner is generating high interest with more than 150 evaluations planned or completed.
“The implementation of our long-term strategy continues with full force, at the same time as we are delivering on our short-term targets. In summary, we add a strong quarter to the books and maintain a positive outlook for our performance over the coming quarters,” said Mr. Lindoff.
In light of these results, we see the insider buying here as a bullish indicator.