When top-level insiders are loading up on company shares, it’s often worth taking a closer look. These insiders have an information advantage and their stock transactions can provide valuable trading signals.
Here, we are going to highlight some interesting insider purchases at Bawag P.S.K. (BG:AV). Bawag is the fourth largest bank in Austria. The company, which serves over two million customers, offers a broad spectrum of savings, payment, lending, leasing, investment, building society, factoring and insurance products both in its branches and online. It’s listed on the Vienna Stock Exchange and currently has a market capitalization of €4.8 billion.
Bawag P.S.K.: Insider Buying
Our data shows that on 20 September, two top-level insiders at Bawag P.S.K. bought stock. The largest purchase was from CEO Anas Abuzaakouk, who purchased 28,500 shares at a price of €52.08 per share, spending €1.48 million on stock. CFO Enver Sirucic made a smaller purchase, picking up 11,213 shares at a price of €53.14 per share and spending €596,000 on stock. Combined, these two insiders spent just under €2.1 million on stock.
This insider trading activity looks quite bullish, in our view. One reason we say this is that the two insiders have spent a substantial amount of money on stock. This suggests that they are confident the stock is set to move higher.
Another reason is that CEO Anas Abuzaakouk has demonstrated trading skill in the recent past. In June, for example, he picked up 44,000 shares at a price of €45.07 per share. Meanwhile, last year, he was buying stock when it was trading below €30. These buys will have generated substantial gains for the insider.
Solid H1 Results
Bawag P.S.K. recently posted a solid set of H1 results.
For the half year, the group’s Retail & SME business delivered a net profit of €161 million, up 31% versus the prior year and equating to a strong return on tangible common equity (RoTCE) of 25%. Meanwhile, its Corporates and Public business delivered a net profit of €61 million, up 62% versus the prior year and generating a solid RoTCE of 13.9%. Over the period, the group grew average customer loans by 3%. It ended the period with a CET1 ratio of 14.4% (December 2020: 14.0%).
Looking ahead, the group said that it sees a solid lending pipeline with diversified opportunities in the second half of 2021. It expects the gradual normalization of economic activity to carry into the second half of the year and as a result, has increased its targets to a RoTCE of 15% and cost income ratio (CIR) of 40% for the full year.
In light of these results, we see the insider buying here as a bullish indicator.