One of the most bullish signals in insider transaction analysis is ‘cluster buying.’ This is where three or more insiders have bought stock within a short period of time.
In this report, we are going to highlight some recent cluster buying at Basware Oyj (BAS1V:FH). Basware is a Finnish company that specializes in cloud-based finance and procurement solutions. Operating in more than 70 countries worldwide, it has more than 9,500 customers globally. The company is listed on the OMX Nordic Exchange Helsinki and currently has a market capitalization of €397 million.
Basware Oyj: Insider Buying
Our data shows that between February 3 and February 7, three insiders at Basware picked up stock.
Those who bought shares were:
- Chief Product Officer Perttu Nihti (500 shares @ €25.51 per share)
- Chief Revenue Officer Alwin Schauer (4,734 shares @ €26.80 per share)
- Chief Technology Officer Mogens Pedersen (3,156 shares @ €26.81 per share)
Combined, these insiders spent about €226,000 (approx. USD $256,000) on stock.
This cluster buying pattern is worth highlighting for a couple of reasons.
Firstly, these individuals are all top-level insiders. All three are part of Basware’s Leadership Team, which means that they are all likely to have deep insight into the company’s operations and prospects. It’s worth noting that the three individuals are all highly experienced in the technology industry.
Secondly, the Chief Technology Officer, Mogens Pedersen, has boosted the size of his position from 1,500 shares to 4,656 shares – an increase of 210%. This suggests he is very confident that the stock is set to move higher.
Order Intake Rising
Basware’s recent Q4 results showed that the group is making solid progress in the cloud software space.
For the quarter, cloud revenue reached €31.6 million, which represented organic growth of 8.4% at constant currencies compared to Q4 2020. This growth helped push EBIT for Q4 up significantly to €1.5 million, an increase of 26% year on year.
Looking ahead, management advised that it expects order intake to rise in 2022.
“Going into 2022, the momentum we have in Procurement clearly indicates that we are steadily heading towards becoming best in class, not only in Networked Accounts Payable, but also in the wider Networked Purchase-to-Pay space. In 2022 our focus is on accelerating sustainable growth. We will continue to strive towards improved sales execution and efficient demand generation, and at the same time increasing the capacity in this area. Based on the pipeline development we experienced in the second half of 2021 and the order intake performance in the last quarter of 2021, we have increased confidence in continuing the growth in order intake in 2022,” said CEO Andersen.
It also advised that it expects net sales to grow by 3-6%, versus 1% growth in 2021.
In light of these solid results, we see the insider buying here as a bullish indicator.