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 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 23.2 billion.
Arjo AB: Insider Buying
Our insider transaction data shows that on February 4, four insiders at Arjo bought stock. Those were picked up shares were:
- President & CEO Joacim Lindoff (56,500 shares @ SEK 89 per share)
- Chairman Johan Malmquist (50,000 shares @ SEK 88.51 per share)
- Independent Director Eva Elmstedt (7,000 shares @ 86.26 per share)
- Executive VP Katarzyna Bobrow (12,800 shares @ 87.88 per share)
Combined, these insiders spent around SEK 11.2 million (approx. USD $1.2 million) on Arjo stock.
Bullish Cluster Buying Pattern
There are a couple of things that stand out about this cluster of purchases.
Firstly, both the CEO and the Chairman have bought stock. These are top-level insiders who are likely to have an excellent understanding of the company’s performance.
Secondly, three out of the four insiders have increased their position sizes by more than 50% or more with these trades. It’s worth noting that President & CEO Karl Lindoff has increased the size of his holding by 135% with his purchase. This suggests that he is very confident the stock is set to move higher.
35% Dividend Increase
Arjo AB recently posted a solid set of 2021 results.
For the year, the group generated organic sales growth of 3.5%. Meanwhile, operating profit was up 18.3% year on year. Earnings per share came in at SEK 2.72 versus SEK 1.93 a year earlier.
On the back of these results, the company proposed a dividend of SEK 1.15 per share – a 35% increase on the prior year dividend.
Looking ahead, management was confident that the company can continue to advance.
”We enter into 2022 with high activity level and a strong order book. We have proven that we are capable of adapting to new conditions and look forward to continue to develop a sustainably and profitably growing Arjo,” said CEO Joacim Lindoff.
In light of these results, and the big dividend increase, we see the insider buying here as a bullish indicator.