Insider buying can provide investors with clues in relation to a stock’s future trajectory. Insiders sell company stock for many reasons. But they only buy stock for one reason – they expect it to go up.
In this report, we are going to highlight some insider buying at CI Financial Corp (CIX:CN). CI Financial is a Canadian financial services company that provides wealth management, asset management, and investment services. It is listed on the Toronto Stock Exchange and currently has a market capitalization of CAD $4.0 billion.
CI Financial: Insider Buying
Our records show that since the beginning of March, three insiders here have purchased stock. Those who have bought shares include:
- Chairman William Holland (50,000 @ CAD $17.07 per share)
- Director Bill Butt (116,500 shares @ CAD $17.16 per share)
- Director Tom Muir (25,000 shares @ CAD $19.14 per share)
Combined, these insiders have spent roughly CAD $3.3 million on CIX stock.
Previous Insider Trades Were Timed Well
This insider activity looks interesting because these three individuals have timed purchases well in the recent past. Back in mid-January, Holland, Butt, and Muir purchased around CAD $5.3 million worth of stock when the share price was hovering around CAD $16.25 to $16.50. Since then, the stock has risen to $19.20, delivering a gain of around 16% to 18%. This is more than twice the return of the S&P/TSX Composite Index.
Additionally, these latest purchases have increased each insider’s holding substantially. Butt’s purchase, for example, has increased the size of his holding by 194%. This suggests that they are confident the stock is set to keep rising.
Record Assets Under Management
CI Financial recently reported record assets under management. As of 31 March, total preliminary assets under management stood at $138.5 billion while wealth management assets stood at $102.1 billion, for total assets of $240.6 billion.
“We believe the growth in assets to record levels reflects our success in implementing our strategic priorities of modernizing asset management, expanding CI’s wealth management platform, and globalizing the firm,” said CEO Kurt MacAlpine.
Additionally, the company advised that it was seeing an improvement in asset management net flows, with the first quarter being the group’s best quarter for net flows since the third quarter of 2017.
“We believe this is attributable to the many client-focused changes we have made, including the integration of our investment management platform, introduction of our new sales and marketing strategy powered by advanced analytics, and our new product management strategy,” said MacAlpine.
These developments come after the company reported strong Q4 and full-year results in mid-February, in which adjusted EPS reached record levels of $0.71 for Q4 and $2.45 for 2020.
Clearly, the company has momentum right now. In light of this momentum, we see insider buying here as bullish.