If a top-level insider is buying company stock, it’s often worth investigating the security further. These insiders tend to have an intimate understanding of their businesses and are often way ahead of analysts when it comes to revenue and earnings trends.
Here, we are going to highlight an insider transaction from a top-level insider at Audacy Inc (AUD:US). Audacy is a free-to-air radio broadcaster that also offers radio online via the internet. The company has around 230 radio stations, covering a variety of genres. It also has a live events business and operates Radio.com which is a digital audio platform that hosts about 750 stations. Audacy offers marketing solutions across its channels. It’s traded on the New York Stock Exchange and currently has a market capitalization of $445 million.
Audacy Inc: Insider Buying
Regulatory filings show that on 11 August, the Chairman, President, and CEO of Audacy, David Field, purchased 125,000 AUD shares at a price of $3.06 per share. This purchase cost the insider approximately $400,000.
This trade looks interesting to us as our data shows that Mr. Field has made a number of well-timed purchases over the last year. He started buying the shares at prices around 50% below the current levels. The latest share purchase suggests that Mr. Field believes the shares remain undervalued.
It’s worth noting that Mr. Field has been President at the company since 1998 and the CEO since 2002. This means it’s likely that he understands the company and its markets very well. He has demonstrated over the last 12 months that he has the ability to identify when the stock is trading at levels below that of its true value.
Strong Revenue Growth
Audacy was severely impacted by the pandemic as companies slashed their marketing budgets. However, its Q2 results suggested that marketing spend is accelerating, as revenue increased markedly.
Second-quarter revenues of $304.5 million were 73% higher than the same period a year prior with spot radio advertising jumping 98%, whilst digital revenues grew 41%. Adjusted EBITDA for the quarter was $39.9 million versus a loss of $20 million a year prior. Liquidity of $194 million was up from $160.2 million at the year end. The company stated that this momentum had continued into Q3 with revenue looking like it may be 10% higher than in the second quarter.
“We are emerging from the pandemic as a meaningfully stronger and better positioned company with significantly enhanced growth potential and are excited by the opportunities ahead as we continue to drive innovation and development of new products, content, and capabilities,” stated Mr. Field.
On the back of these strong Q2 figures as well as the very confident outlook statement, we see the recent insider trading as bullish. It gives the indication that the CEO continues to believe the market is undervaluing Audacy.