Boku Inc (BOKU:LN)
12-month performance: +22%
Insider activity: Bullish
Insider buying pattern: Large purchase from CFO
Recent news: Partnership contract signed with Digi Telecommunications
Top-level corporate executives such as CFOs tend to have an information advantage over other investors. If these insiders are buying stock, it is often a bullish development.
Here, we are going to highlight a large CFO purchase at Boku Inc (BOKU:LN). Boku provides mobile billing, payment and identity solutions for mobile network operators and merchants. It has operations in the Americas, the Asia Pacific, Europe, the Middle East and Africa. It’s listed on the London Stock Exchange’s AIM market and currently has a market capitalization of £346 million.
Boku Inc: insider buying
Regulatory filings show that on 27 October the CFO of Boku Inc, Keith Butcher, purchased 134,000 BOKU shares at a price of £1.20 per share. This purchase – which cost the insider £160,800 – boosted his holding by just over 36%.
Source: 2iQ Research
Significant increase in stake
This insider purchase looks interesting for a few reasons. Firstly, Butcher is a key insider and is likely to have access to real-time data that an outsider is unlikely to have.
Secondly, this is a large purchase both in monetary terms and relative terms. This gives added weight to the importance of the purchase. The fact that he has increased his stake significantly suggests Butcher is very confident in Boku’s future prospects.
Strong revenue growthBoku shares are currently up over 30% since the start of 2020 and have gained 50% since mid-July. The billing and payments divisions have both seen revenues increasing and H1 2020 EBITDA was 84% higher compared to H1 2019. The acquisition of Fortumo on 1 July 2020 bolstered the payments division significantly.
A recent partnership contract with Digi Communications is key as it moves Boku into identity solutions. Digital fraud continues to grow and identity solutions on mobile phones can help protect against it. This means identity solutions are increasingly in demand. Digi is the first mobile service provider in Malaysia to partner with Boku to launch mobile identity products but there is the scope for more contracts to materialize.
Given this recent news, we see the insider buying here as a bullish signal. Boku’s share price has risen significantly recently, however, there could be more upside to come.