Top-level corporate executives such as CEOs tend to have an information advantage over other investors. If they’re buying stock, it’s normally a positive development.
Here, we are going to highlight a CEO purchase at Brewin Dolphin (BRW:LN). Brewin Dolphin provides wealth management services in the United Kingdom. Its offering includes investment management, financial planning, advisory, managed portfolio, custody, trade execution, and settlement services. It’s listed on the London Stock Exchange and currently has a market capitalization of £820 million.
Brewin Dolphin: insider buying
Regulatory filings show that on 26 November the CEO of Brewin Dolphin, Robin Beer, purchased 38,000 BRW shares at a price of £2.66 per share. This purchase cost the insider approximately £100k.
This CEO purchase looks interesting for a couple of reasons. Firstly, our data shows this is the biggest insider purchase of Brewin Dolphin shares in 2020.
Secondly, Beer purchased 25,000 shares back in March at much lower levels. It is interesting, therefore, that he is investing a significant amount of money in BRW shares at these higher levels. It’s worth pointing out that Beer has over 20 years of experience in the financial services industry and has been at Brewin Dolphin for 12 years, gaining experience by working in various areas of the business. This suggests he has a detailed knowledge not just of the business itself but also the financial services industry.
Brewin Dolphin shares are currently down about 20% year to date. This is due to the impact of Covid-19 on financial markets. The full-year results were resilient, however, with funds under management excluding acquisitions flat year on year. Funds under management increased in the second-half from £41.4 billion to £47.6 billion. Statutory profit before tax was only marginally down 0.8% at £62.1m. Whilst warning about market conditions the company said it is “well placed to capture the momentum once markets rebound.”
Given the recent news, we see the insider buying here as a positive sign. It would suggest that the CEO feels the shares will recover further.