Corporate insiders tend to have the most up-to-date information on their companies’ operations and performance. If these individuals are buying company stock, it’s often a sign that performance is strong and that the outlook for the stock is favorable.
In this report, we are going to highlight some insider buying at Bonesupport Holding AB (BONEX:SS). Bonesupport is a Swedish orthobiologics company that is developing products that help treat patients with fractures and bone voids caused by trauma, infection, disease, or related surgery. Its main offering, CERAMENT®, is a range of radiopaque injectable osteoconductive and drug-eluting bioceramic products that have a proven ability to heal bone defects. The company is listed on the OMX Nordic Exchange Stockholm and currently has a market capitalization of SEK 5.2 billion.
Bonesupport Holding: Insider Buying
Our data shows that on 16 July, Bonesupport Chairman Lennart Johansson purchased 20,000 BONEX shares at a price of SEK 80.33 per share. This trade cost the insider SEK 1.6 million (approx. USD $185,000).
Mr. Johansson – who has been Chairman since 2019 – has a wealth of experience both in healthcare and investment management. Currently, he is a board member at Swedish Orphan Biovitrum AB, Deputy Chairman at Mölnlycke Health Care AB, and Chairman at Vectura AB. Previously, he was Managing Director (Business Development, Operating and Financial Investments) at Swedish Investment Group Investor AB.
What stands out about this trade is that it has increased his holding from 50,000 shares to 70,000 shares – an increase of 40%. This suggests that the insider is very confident that, going forward, the stock is set to rise.
Strong Growth in Q2
Bonesupport generated strong growth in the second quarter of 2021. For the three months to the end of June, net sales increased by 43% (+58% at constant exchange rates) to SEK 51.8 million. Meanwhile, gross margin came in at 89.5% versus 86.7% in the same quarter a year earlier.
During the quarter, the company received ‘breakthrough device designation’ for its ‘CERAMENT G’ product from the US Food and Drug Administration (FDA). It also announced that it had been awarded a Synthetic Implantable Products agreement with Premier – one of the leading purchasing networks in the US.
While the company advised that the pandemic continues to be a “limiting factor”, management was confident about the future. “I look forward to being able to seriously accelerate our journey as the pandemic comes under control. Eventually, our goal is to grow sales by 40 percent per year,” said CEO Emil Billbäc.
In light of the recent developments here, we see the insider buying as a bullish indicator.