When insiders at small firms are buying company stock, it can pay to take a closer look. Research on insider trading shows that insiders at small firms tend to earn much larger profits from their purchases of company shares than insiders at large firms.
In this report, we are going to highlight some insider buying at a small US technology company, Asure Software Inc (ASUR:US). Asure provides Human Capital Management software that’s delivered via the cloud on a subscription basis. Its software, which is designed for small and mid-sized businesses, helps firms stay compliant with HR laws, and eliminates the need to hire full-time back-office staff. The company is listed on the NASDAQ Capital Market and currently has a market capitalization of $167 million.
Asure Software Inc: Insider Buying
Our insider transaction data shows that on 4 June, Asure board member Carl Drew bought 20,000 ASUR shares at a price of $8.15 per share. This purchase – which cost the insider $163,000 – increased the size of his holding from 17,165 shares to 37,165 shares.
A Confident Purchase
Mr. Drew – who joined Asure’s board in April 2020 – has broad experience in the industry. Currently, he is President of Harvard Maintenance, a company that offers employee training, interactive learning, and assessment. Previously, he was CFO of CompuPay Inc, which provides a platform for employee benefits. This experience means that he is likely to have a good understanding of Asure’s prospects. Our records show that his last purchase of ASUR stock was timed well.
What stands out about this purchase of 20,000 shares is that it has increased the size of his holding by 117%. This suggests that he is very confident that the stock is set to move higher in the near future.
Asure’s recent first-quarter results were encouraging. For the period, total revenue was $19.8 million, up 20.5% from Q4 2020 and up 4.5% year over year. EBITDA was $2.6 million, up from -$1.6 million in Q4 2020 and $2.0 million in Q1 2020 while Non-GAAP earnings per share were $0.12, up from $0.00 in Q4 2020. Small-business bookings increased more than 90% year over year while total bookings increased more than 20% year over year.
In terms of the outlook, management was quite optimistic. “Asure has a clear strategy for growth and we remain focused on its execution. We feel that we are well-positioned for growth as the economy transitions back to normal conditions," said CFO John Pence. The company advised that this year, it is striving to generate 10% organic and 10% acquired revenue growth.
In light of this outlook, we see the insider buying from Mr. Drew as bullish. It suggests that he is confident about the future and that he sees the stock as undervalued at present.