Top-level corporate insiders such as CEOs and Chairmen tend to have the most up-to-date information on their companies. If these insiders are buying company stock, it signals that they’re confident about the future.
In this report, we are going to highlight some interesting insider buying at Cancom SE (COK:GR). Cancom is a German provider of IT infrastructure and services that specializes in cloud transformation. It is listed on the XETRA and currently has a market capitalization of €1.7 billion.
Cancom: insider buying
Our records show that on 3 November, Cancom’s Chairman and CEO Rudolf Hotter purchased 14,551 shares. This purchase, which was his first since he became CEO in February this year, cost the insider a total of €526,000.
This insider buying is worth highlighting for a couple of reasons. Firstly, insiders at Cancom don’t buy stock very often. Our records show that the last insider purchase here was back in October 2018. 2iQ’s Insider Model views this purchase from Hotter as bullish.
Secondly, Hotter has significant experience in the IT industry. In 1986, he founded Computer Partner AG which was later acquired by Einsteinet. Then, in 2003, he founded ECS Computer Partner GmbH. At Cancom, he has been a member of the Executive Board since 2005. Given his industry experience, we see this large purchase as a positive development.
Cloud revenues rising
Cancom posted a solid set of third-quarter results on 12 November. For the period, group revenue was up 8.8% on the same period last year. Compared to the previous quarter of 2020, which was impacted by the coronavirus, EBITDA was up 57%. Meanwhile, for the first nine months of the year, revenues in the Cloud Solutions segment was up 25%.
Looking ahead, the group said that for the financial year 2020, it expects a “significant increase” in sales compared to 2019, and a moderate increase in gross profit. It also said that it has a strong order intake for IT infrastructure.
In light of these results, we see the insider buying here as a bullish signal. It suggests that the Chairman believes the stock is set to move higher.