Insider Buying Report: Bank of Georgia PLC (BGEO:LN)

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Top-level insiders tend to have a good understanding of their companies’ operating activities. If they’re buying company stock, it’s often a sign that the outlook for the stock is attractive.

Here, we are going to highlight some insider purchases at Bank of Georgia PLC (BGEO:LN). Bank of Georgia is a financial services company that carries out retail banking activities, investment banking, and wealth management operations in Georgia. It also provides banking services in Belarus. It’s traded on the London Stock Exchange and currently has a market capitalization of £612.6 million.

Bank of Georgia PLC: Insider Buying

Our insider transaction data shows that between March 11 and March 17, two insiders at Bank of Georgia bought stock. Those who bought shares were:

  • CFO Sulkhan Gvalia (20,000 shares @ £11.67 per share)

  • Chairman of the Board Neil Janin (3,100 shares @ £10.30 per share)

Meanwhile, between February 22 and March 8, investment management company Gemsstock Ltd, which is represented on the board, also bought stock. It picked up around 500,000 shares, spending roughly £6.4 million on stock.

Value Investor

These insider purchases came to our attention for a few reasons.

Firstly, the Investment Manager buying stock is a value-focused firm founded by Alasdair Breach, who has served as a director at Bank of Georgia since 2018. Mr. Breach was formerly an investment banker where he was involved in research and was Head Economist at UBS Russia. This means he is likely to know the region the business operates in well.

Secondly, the CFO has upped his stake by close to 20%. This gives the impression that he firmly believes that the shares are undervalued by the market.

Strong Performance

Bank of Georgia finished 2021 strongly, and this enabled it to post solid results for the year.

For the period, it reported a 25.2% increase in operating income versus the year prior, while profit was up close to 150% at GEL 727.1 million ($232.6 million). Basic EPS for the year came in at GEL 15.22 per share, which was an improvement of nearly 150% on the year before.

At the end of the year, after successfully deploying some excess liquidity during the second and third quarters of 2021, the bank's liquidity coverage ratio stood at 124.0% while its net stable funding ratio stood at 132.5%, comfortably above the 100% minimum required levels.

“Overall, we have continued to deliver a strong performance, enabled by our continuously improving digital and data analytics capabilities and the ongoing systematic focus on customer satisfaction and employee empowerment. We expect strong economic growth in 2022, despite the downside risks, and we are well positioned across key areas to unlock more opportunities going forward, and to continue delivering a combination of strong growth and high profitability,” said CEO Archil Gachechiladze.

On the back of these encouraging results and improving outlook for the business, we see the recent insider buying at Bank of Georgia as bullish. The large size of the insider buying suggests to us that these knowledgeable insiders are very confident that the market is undervaluing the company’s true worth.