12-month performance: +35% Insider activity: Bullish Insider buying pattern: Purchases from Chairman and CFO Recent news: Reduced guidance due to operational setback
Corporate executives and company directors tend to have the most up-to-date information on their companies' operations and future prospects. If these insiders are buying company stock, it’s worth taking note.
Here, we are going to highlight some interesting insider buying at Centamin PLC (CEY:LN). Centamin is a gold producer that is predominantly focused on gold mining in Egypt. The company is listed on the London Stock Exchange and currently has a market capitalization of £1.8 billion.
Centamin: director dealings
An analysis of insider transaction activity at Centamin reveals that two insiders have purchased stock recently. PDMR filings reveal that on 5 October, both Chairman of the Board James Rutherford and CFO Ross Jerrard purchased stock. Rutherford bought 100,000 shares at a price of £1.52 per share while Jerrard acquired 15,000 shares at a price of £1.48 per share. Combined, these insiders spent £174,200 on Centamin stock.
Source: 2iQ Research
This insider transaction activity is significant for a number of reasons. Firstly, these are top-level insiders that have bought stock. Both are likely to have a deep insight into the company’s operations. Secondly, this buying activity represents the largest amount of insider buying at Centamin within a quarter in several years. Third, Rutherford has a very high long-term trading IQ of 129. This tells us his previous trades have been timed very well.
Centamin recently advised that, due to an operational setback, it was reducing its production forecast for the fourth quarter of 2020. It now expects production for the fourth quarter to be approximately 70,000 ounces. That compares to preliminary gold production for the third quarter of approximately 120,000 ounces. Centamin shares fell more than 20% on the news.
The recent purchases from Rutherford and Jerrard indicate that they expect Centamin’s share price to bounce back. We see this insider buying as a bullish signal.