Insider buying can provide valuable trading signals. Insiders sell their company stock for a number of different reasons. But they only buy stock for one reason – they expect the share price to go up.
Here, we are going to highlight insider purchases at Bawag P.S.K (BG:AV). Bawag is an Austrian bank that has operations in Austria, Germany, Netherlands, Switzerland and a number of other developed markets. The company offers a broad spectrum of savings, payment, lending, leasing, investment, and insurance products both in its branches and online. It’s listed on the Vienna Stock Exchange and currently has a market capitalization of €4.08 billion.
Bawag P.S.K: Insider Buying
Our data shows that two insiders have purchased BG stock recently. On 10 June, Anas Abuzaakouk, the Chairman of the Board/CEO of Bawag, purchased 44,000 BG shares at a price of €45.07. This purchase cost the insider approximately €1.98 million.
Meanwhile, between 8 and 11 June, Satyen Shah, a member of the Executive Board, purchased 3,412 BG shares at an average price of €45.60. This purchase cost Shah around €156,000.
Well Timed Historical Purchases
These insider purchases are interesting as our data shows that both of these insiders picked up stock at regular intervals throughout 2020 at significantly lower levels – timing their trades very well.
Additionally, the size of the CEO’s trade is of note. He is likely to have a better understanding of the company than anyone else. The purchase of close to €2 million of stock suggests he is confident in the future prospects of the company.
Bawag reported a positive set of Q1 numbers. Core revenues were 2% higher at €297 million vs Q1 2020 while net interest income was up 4% year on year at €230 million. Customer loans increased by 3% during the quarter and payment holidays fell to 0.4% of the customer base. The company managed to reduce core operating expenses by 3% to €122 million through both efficiency and productivity measures.
“We started the year with a strong set of operating results delivering net profit of €74 million, RoTCE of 10.2% and cost-income ratio under 41%. Normalizing for front-loaded regulatory charges, this would translate into net profit of €103 million and an RoTCE of 14.3%. We believe we are at the early stages of a gradual normalization of economic activity that will carry into the second half of the year,” said CEO Anas Abuzaakouk.
Reflecting on a solid set of results, we see the insider buying at Bawag as bullish. It suggests that the insiders see further momentum in the share price, given the expected favorable macro environment.