Top-level corporate executives such as CEOs are some of the most informed participants in the market. If these insiders are buying company stock, it’s often worth taking a closer look.
In this report, we are going to highlight a large CEO purchase at Brenntag SE (BNR:GR). Brenntag is a global leader in chemical distribution. Operating in North America, Latin America, Europe, and Asia, it provides chemical products to a range of industries including adhesives, paints, oil & gas, food, water treatment, personal care, and pharmaceuticals. The company is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €12.1 billion.
Brenntag: Insider Buying
Our insider transaction data shows that on 28 May, Brenntag’s CEO Christian Kohlpainter bought 5,000 BNR shares at a price of €77.10 per share. This purchase – which cost the insider €386,500 – increased his holding from 29,000 shares to 34,000 shares.
High Trading IQ
This trade is worth highlighting due to the fact that Mr. Kohlpainter has made a number of well-timed purchases recently. In September 2020, the insider picked up 5,000 shares at a price of €54.28 per share. Since then, the stock has risen around 45%. He also picked up 5,000 shares in January this year at a price of €68.00 per share. Since then, the stock has climbed 15%. Overall, he has a very good track record when it comes to timing his trades well. Our model gives the insider a high long-term trading IQ of 118.
Solid Q1 Results
Brenntag recently posted a solid set of first-quarter results. While revenue was down 2.5% year on year to €3,132.5 million, operating EBITDA was up 21% year to €300.3 million. Earnings per share totaled €0.63 compared to €0.74 a year ago. The company said the reduction in EPS was due to a non-recurring, extraordinary increase in provisions related to a tax audit concerning past handling of alcohol taxes.
“Despite continued challenging macro-economic and operational conditions, we managed to show very strong results for all key figures,” said CFO Georg Müller. “We are very satisfied with our results,” added Mr. Kohlpaintner.
Looking ahead, the company confirmed its outlook. For the year, it expects operating EBITDA to be in the range of €1.08 billion to €1.18 billion. It expects both divisions, Brenntag Essentials and Brenntag Specialities, to contribute to the growth of operating EBITDA.
In light of these solid results, we see the insider buying here as bullish. The purchase from the CEO suggests that he is confident about the future and that he expects the stock to keep rising.