12-month performance: -22% Insider activity: Bullish Insider buying pattern: Large purchases from CEO and Chairman Recent news: Solid Q2 results
Top-level corporate executives such as CEOs and CFOs tend to have an information advantage over other investors. If these insiders are buying company stock, it can be a sign that the stock is undervalued.
Here, we are going to highlight a large insider buy at CBOE Global Markets Inc (CBOE:US). CBOE Global Markets is one of the world’s largest exchange holding companies, offering cutting-edge trading and investment solutions to investors around the world. It’s listed in the US and currently has a market capitalization of $9.8 billion.
CBOE Global Markets: insider buying
An insider transaction that has caught our attention here is a large purchase from Chairman of the Board, President, and Chief Executive Officer Edward Tilly. Form 4 filings show that on 14 September, the insider purchased 10,000 CBOE shares at a price of $89.42 per share. The total cost of the transaction was $894,200.
Source: 2iQ Research
First CEO purchase in over five years
This purchase is significant for several reasons. Firstly, it’s a substantial purchase. It’s the largest insider purchase at CBOE for a number of years. Furthermore, it has boosted the insider’s holding by 6.5%.
Secondly, Tilly – who has been CEO since 2013 – doesn’t purchase stock very often. This is his first purchase in over five years. This suggests that the stock could be worth further research right now.
Solid Q2 results
CBOE shares have underperformed this year. Currently, the stock is down about 25% year to date.
However, second-quarter results, issued in late July, were solid. Net revenue was up 5% while diluted earnings per share were up 32%. Over the quarter, the company returned $139 million to shareholders through share repurchases and dividends. “I am pleased to report solid financial results for the quarter, clearly highlighting the strength of the diversification of our revenues from multiple asset classes and non-transactional services,” said Tilly.
Tilly’s recent purchase suggests that he believes CBOE stock is undervalued at present. We see this insider buying activity as a bullish signal.
Disclaimer: Neither 2iQ Research GmbH nor its content providers are responsible for any damages or losses arising from any use of this information.
Getting the most of Insider Trading Data - Free Book