When a top-level insider makes a large purchase in their own company, investors should take note. It’s not a stretch to say that these individuals are some of the most informed participants in the market.
In this report, we are going to highlight a large purchase from a top-level insider at Atea ASA (ATEA:NO). Atea is a technology company that supplies IT infrastructure and related solutions for businesses and public sector organizations in the Nordic countries and Baltic regions. It’s listed on the Oslo Stock Exchange and currently has a market capitalization of NOK16.7 billion.
Area ASA: Insider Buying
Our data shows that on 7 May, Atea’s Chairman Ib Kunoe purchased 427,000 shares at a price of NOK 151 per share. This transaction cost the insider NOK 65 million (approx $7.8 million).
Experienced IT Investor
This insider trade is worth highlighting due to the fact that Kunoe – who is an experienced investor in the IT sector – has made a number of well-timed purchases in the recent past. In February, for example, he purchased 1.2 million shares at a price of NOK 137.50 per share. Since then, the share price has risen to NOK 155. Meanwhile, in March last year, he picked up shares when the stock was trading near NOK 70.
Additionally, the size of the purchase is worth noting. The fact that Kunoe has spent another NOK 65 million on stock (at higher prices) suggests he is confident the stock is set to keep rising.
Strong Q1 Results
Atea’s first-quarter results showed that the company continues to advance. For the period, revenue was up 11% year on year to a record NOK 10.0 billion, with growth across all lines of the business. Meanwhile, EBIT came in at NOK 176 million, up from NOK 32 million last year. Diluted earnings per share were NOK 1.16 versus NOK 0.05 in Q1 2020.
Looking ahead, Atea said that, based on its competitive advantages and leading market position in the Nordic and Baltic regions, it is well-positioned to maintain a long-term growth rate faster than the IT infrastructure market. It also advised that it expects to “steadily increase” its operating profit through a combination of revenue growth, expansion in higher margin products and services, and tight control of operating expenses.
In light of these strong results, we see insider buying here as bullish.