CFO purchases can be very informative insider transactions. CFOs tend to have a thorough understanding of their firms’ financials and some studies have found that these insiders earn higher profits following their purchases of company shares than CEOs.
In this report, we are going to highlight some CFO buying at Big Technologies PLC (BIG:LN). Big Technologies has developed an integrated technology platform for the remote monitoring of individuals. Its technology, which is sold under the ‘Buddi’ brand, helps people that are facing cognitive and/or physical decline, to live independently. The company – which came to the market in July via an IPO – is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and currently has a market capitalization of £909 million.
Big Technologies: Insider Buying
Our insider data shows that Big Technologies CFO Daren Morris has bought a substantial amount of company stock this month. Between October 14 and October 15, the insider purchased 108,755 shares at an average price of £2.96 per share. The purchases cost the CFO £322,200 and increased his holding to 308,755 shares.
What stands out about this trading activity is that it has increased the size of Mr. Morris’ holding by a significant 54%. The fact that the CFO has boosted his stake by this amount so soon after the IPO suggests that he is very confident in relation to the outlook for the stock.
It’s worth noting that Mr. Morris has significant experience in the investment space. He spent the first eighteen years of his career in investment banking and accountancy and was a Managing Director at both UBS Investment Bank and Morgan Stanley. Here, he advised manufacturing and technology companies on their expansion and financing strategies. Before joining Big Technologies, he was CFO of Volex PLC from 2015 to 2020 where he was part of the executive management team that led a turnaround of the company and drove a quadrupling of the share price over the period.
Strong H1 Performance
Big Technologies’ half-year report, posted on September 23, showed that the company is growing at a rapid pace right now.
For the period, revenue came in at £18.0 million, up from £12.8 million in H1 2020, while adjusted EBITDA amounted to £10.2 million, versus £6.7 million a year earlier. Adjusted diluted earnings per share were 2.8p versus 1.6p in H1 2020.
As a result of this strong performance, the company ended the period with cash of £23.8 million on the books, compared to £7.0 million at the end of H1 2020.
Looking ahead, the group said that it expects to deliver a full-year performance in line with market expectations (analysts expect revenue growth of 22%) and is confident about its longer-term prospects.
“We remain confident about our prospects to continue to develop our company and our innovative technologies," commented CEO Sara Murray OBE.
Considering these results, we see the insider buying here as a bullish indicator. It suggests that the CFO expects the stock to rise from here.