Corporate insiders tend to have far more information on their companies than outsiders such as analysts and retail investors do. If these individuals are buying company stock, it’s often worth taking a closer look.
In this report, we are going to highlight some interesting insider buying at Arjo AB (ARJO: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 33.9 billion.
Arjo AB: Insider Buying
Our insider transaction data shows that between November 5 and November 8, two board members at Arjo AB bought stock. Those were picked up shares were:
- Ulf Grunander (13,000 shares @ SEK 118.87 per share)
- Eva Elmstedt (8,000 shares @ SEK 119.35 per share)
Combined, these insiders spent around SEK 2.5 million (approx. USD $286,000) on Arjo stock.
Multiple Insider Purchases
This insider activity is worth highlighting for a couple of reasons.
Firstly, both insiders have increased the size of their holdings by a significant percentage with these trades. Grunander’s purchase increased the size of his position by 16% while Elmstedt’s buy increased the size of her holding by 40%. This suggests the insiders are quite confident the stock is set to move higher.
Secondly, this trading activity comes not long after a large purchase from CEO and President Joacim Lindoff. A little over two months ago, Lindoff bought 8,418 shares at a price of SEK 107.50, increasing the size of his position by around 25%.
Solid Q3 Results
Arjo recently posted a solid set of Q3 results.
For the third-quarter of 2021, net sales increased 5% to SEK 2,247 million while adjusted EBITDA increased 16.8% to SEK 524 million. Earnings per share amounted to SEK 0.69 versus SEK 0.49 a year earlier.
During the quarter, the company’s SEM scanner – which can identify pressure injury risk five days earlier than a visual skin assessment – was awarded an Innovative Technology Contract from Vizient, one of the largest Group Purchasing Organizations (GPOs) in the US. The company noted that there is very high interest in this technology with over 100 evaluations ongoing.
Looking ahead, management was confident in relation to the company’s near-term and long-term prospects. “We continue to work closely with our customers and enter the final quarter of the year with a high activity level and well-filled order books. Based on this and our assumptions regarding the short-term development, our aim is now to close 2021 with growth in the upper part of the Group’s target. All in all, this strengthens my view of Arjo as very well positioned for the future, both short and long term,” said Mr. Lindoff.
In light of these results, we see the insider buying here as a bullish indicator.