Insiders have access to real-time information on their companies and often also have a wealth of experience that can help them evaluate their firms’ investment prospects. If they are buying company stock, it’s generally worth taking a closer look.
In this report, we are going to highlight some interesting insider buying at Belships ASA (BELCO:NO). Belships is a fully integrated ship owner and operator that is headquartered in Oslo, Norway. The company, which owns a modern fleet of Supramax and Ultramax vessels, provides shipping transportation services to customers and partners all over the world. It is listed on the Oslo Stock Exchange and currently has a market capitalization of NOK 3.4 billion.
Belships ASA: Insider Buying
Our data shows that between November 29 and December 6, board member Frode Teigen bought 800,000 BELCO shares in four transactions. In total, the insider spent around NOK 10.5 million (approx. USD $1.2 million) on stock.
This insider trading activity is worth highlighting due to the fact that Mr. Teigen has made well-timed purchases here in the recent past. In early June, for example, he bought BELCO stock when it was trading near NOK 10. Over the next few weeks, the stock rose to NOK 15.
It’s worth noting that Mr. Teigen is the owner of Kontrari AS and Kontrazi AS – private holding companies with substantial investments in a number of shipping and fishing companies including Belships ASA, Egersund Group AS, Fjord Line AS and Nordic Halibut AS. Previously, he held various management positions in the bulker owner Thoresen Thai in addition to being one of the largest shareholders in the company. This background means he is likely to have a good understanding of both the industry and Belships’ prospects.
Strong Freight Market
Belships’ recent Q3 results showed that the company has strong momentum right now.
For the period, the group generated operating income of USD $205.3 million, up from $43.3 million a year earlier. Net income amounted to $35.2 million versus -$4.2 million a year earlier.
Looking ahead, Belships advised that 77% of ship days in Q4 are booked at about USD $29,000 net per day while 42% of ship days in the next four quarters are booked at about USD $25,500 net per day. These figures are comfortably above the group’s average fleet cash breakeven of about USD $10,500 per day.
“The supply side as observed from the number of deliveries and the publicly quoted orderbook for our segment is historically low. On the back of stable demand, we remain optimistic in terms of market prospects,” wrote management in the Q3 results. “Based on current market expectations, we expect to generate significant free cash flow and aim to pay a quarterly dividend as announced with our dividend policy,” management added.
In light of these good results, we see the insider buying here as a bullish indicator.