Insider buying can provide clues about a stock’s future movements. Insiders sell company stock for many reasons. But they only buy stock for one reason – they expect it to rise.
In this report, we are going to highlight some interesting insider buying at Banca Ifis SpA (IF:IM). Banca Ifis is a diversified and highly specialized Italian bank. The bank is one of the main players in the Italian non-performing loan (NPL) market and a leader in the unsecured small ticket segment. The company is listed on the Borsa Italiana and currently has a market capitalization of €744 million.
Banca Ifis: Insider Buying
Our insider transaction data shows that between 4 June and 25 June, board member Riccardo Preve bought stock on a number of occasions. Over this period, the insider made eight separate purchases, buying a total of 116,000 shares at prices between €12.66 and €13.76 per share. In total, the insider spent around €1.5 million on stock.
During this period, Group Capital Markets Director Saverio Bonavita also purchased 5,000 shares at a price of €13.76, spending just under €70,000 on stock.
Mr. Preve has considerable company experience so he is likely to know the company well. He was re-elected to the Board of Directors on 23 April 2020 after being a Director of the company from 2005 to April 2019. Currently, he is Chairman of the Board of Directors of Ifis Rental Services S.r.l. – a rental company that is 100% owned by Banca Ifis.
Mr. Preve’s recent trading activity stands out due to the size of his purchases. The fact that he has spent around €1.5 million on shares within the space of a few weeks suggests that he is very confident that the stock is set to move higher. Our records show that this buying activity represents the largest amount of insider buying at Banca Ifis within a quarter for several years.
All-Time High For Cash Collections
In May, Banca Ifis posted a strong set of first-quarter results that were boosted by a good performance in the company’s commercial and corporate banking division, and healthy cash collections.
For the quarter, net banking income totaled €137.7 million, up 30% from the first quarter of 2020 while net profit came in at €20.1 million, up €10 million on the first quarter of last year. The company’s equity position strengthened with its CET1 ratio ending the quarter at 11.77% (+0.48% on 31 December 2020). A dividend of €0.47 was declared for the period.
Banca Ifis advised that the quarter saw an all-time high recorded for cash collections on NPL portfolios acquired (€81 million). It also said that, as a result of the improving macroeconomic environment, it was seeing positive repayment trends.
In light of these strong results, we see the insider buying here as a bullish indicator.