If corporate insiders are buying company stock, it’s often worth investigating the stock further. Insiders tend to have a very good understanding of their businesses and are often way ahead of analysts and portfolio managers when it comes to revenue and earnings trends.
In this report, we are going to highlight some interesting insider buying at Atea ASA (ATEA:NO). Atea is an IT infrastructure company that serves businesses and public sector organizations in the Nordic and Baltic regions. Offering a full range of hardware and software from the world’s top technology companies, it provides solutions related to cloud computing, security, networking, collaboration, automation, data management, and more. It’s listed on the Oslo Stock Exchange and currently has a market capitalization of NOK19.3 billion.
Atea ASA: Insider Buying
Our insider transaction data shows that between 19 July and 20 July, two insiders at Atea bought stock. On 19 July, Chairman Ib Kunoe bought 167,000 shares at a price of NOK 161, spending NOK 26.9 million (approx. USD $3.0 million) on shares.
Then, on 20 July, board member Sven Madsen purchased 12,971 shares at a price of NOK 160.97, spending NOK 2.1 million (approx. $234,000) on shares. Chairman Ib Kunoe also made a smaller purchase on 20 July, adding another 12,000 shares at a price of NOK 160.68 per share.
This insider activity is worth highlighting for a couple of reasons. Firstly, Mr. Kunoe has made well-timed trades in the recent past. In February, the insider picked up 1.172 million Atea shares when the stock was trading at NOK 137.50. Since then, it has risen to NOK 170.
Secondly, both of these insiders have a background in finance. Mr. Kunoe is an experienced investor in the IT sector and is the founder of Consolidated Holdings A/S – an investment holding company. He is also the main shareholder in a number of companies such as Netop Solutions and Columbus IT A/S. Mr. Madsen is the CFO of Consolidated Holdings A/S and has extensive experience in corporate reporting, financing, and corporate management in companies.
Record High Revenue
Atea recently posted a solid set of second-quarter results. For the period, revenue came in at a record high NOK 10.93 billion, up 3.1% year on year (7.8% in constant currency), with strong demand for IT products offsetting hardware supply constraints. Meanwhile, EBIT before share-based compensation rose 4.6% to NOK 243 million, as a result of higher product sales and relatively low growth in operating expense.
Looking ahead, the company said that it is “very well-positioned” to capture emerging growth opportunities in the IT infrastructure market. It noted that the pandemic has accelerated the digital transformation of many organizations and that this is creating a very favorable market environment for the company. It added that it is taking active measures to drive productivity across the business, with particular focus on capturing economies of scale across the group, and that it expects a “strong improvement” in operating profit for the full year 2021.
In light of this outlook, we see the insider buying here as a bullish indicator.