Corporate executives and directors tend to have superior information in relation to their firms’ operating activities. If these insiders are buying company stock, it’s generally a bullish signal.
Here, we are going to highlight insider buying at Blackstone Group Inc (BX:US). Blackstone Group is a US-based alternative investment management company. The company’s clients include pension funds, leading institutions, and high net worth individuals. It invests in a variety of alternative asset classes such as private equity, real estate, debt markets, and hedge funds. It also offers advice on mergers and acquisitions. It’s listed on the New York Stock Exchange and currently has a market capitalization of $72.7 billion.
Blackstone Group Inc: Insider Buying
Our insider transaction data shows that on April 27, a director at Blackstone Group, Ruth Porat, purchased 5,000 BX shares at a price of $109.69 per share. This purchase cost the insider around $550,000 and increased her holding by about 45%.
The insider buying at Blackstone Group is worth highlighting for a couple of reasons.
Firstly, Ms. Porat is an experienced financial services professional who has held a number of senior roles at Morgan Stanley in the past. As well as serving as Co-Head of Technology Investment Banking, she also served as CFO. This means she is likely to be very capable at assessing the financial prospects of a business.
Secondly, our insider transaction data shows that Ms. Porat spent over $600,000 on stock at the end of February. She has therefore spent over $1 million on Blackstone Group stock since the turn of the year and increased her stake by close to 170%. This suggests to us that Ms. Porat believes the market is underestimating the prospects of the business.
Blackstone Group performed strongly in Q1 2022 despite being faced with a difficult economic backdrop.
The company saw an inflow of $50 billion of funds during the first quarter taking the total inflow over the previous 12-month period to $290 billion. Total assets under management came to $915.5 billion which was a 41% increase year over year. Net management and advisory fees of $1.47 billion were 25% higher in Q1 2022 than a year prior while distributable earnings of $1.93 billion were 63% higher year on year. The group advised that $1.7 billion will be distributed to shareholders in respect to the first quarter.
“The first quarter represented one of the best in Blackstone’s 36-year history despite an extremely challenging market backdrop. Our flagship strategies delivered significant outperformance for investors while our powerful platform expansion continued with $50 billion of inflows in the quarter. This translated once again to exceptional financial results for our shareholders,” said Stephen Schwarzman, Chairman and Chief Executive Officer of Blackstone.
In light of these excellent results, we see the recent insider buying as bullish. It would suggest that the director strongly believes that the market is undervaluing the shares.