Insider buying can provide investors with valuable clues about a stock’s potential. Insiders sell company stock for many reasons. But they only buy stock for one reason – they expect it to go up.
Here, we are going to highlight an insider purchase at Clarkson PLC (CKN:LN). Clarkson provides integrated shipping services worldwide. It operates through four segments: Broking, Financial, Support, and Research. It’s traded on the London Stock Exchange and currently has a market capitalization of £847 million.
Clarkson PLC: Insider Buying
Regulatory filings show that on 30 March, Chairman William Thomas, purchased 3,631 CKN shares at a price of £27.40 per share. This cost the insider approximately £100,000 and raised his holding by around 175%.
Our data shows that this is only the second insider purchase during the last 12 months at Clarkson. It also shows that the Chairman has increased his stake by a significant percentage which suggests he is confident the share price will rise.
It’s worth noting that Thomas holds a number of senior positions in the industry which means he is likely to have a wealth of experience and knowledge. He is a senior Vice President at Enterprise Services, a Non-Executive Director at the Co-Operative Bank and a Non-Executive Independent Director at LogicNow.
Clarkson produced full-year results that were ahead of market expectations. A strong performance in the broking division offset weakness in the financial services division. Strong free cash flow generation meant that the dividend was increased for the 18th consecutive year. Free cash resources stood at £81.1 million and the order book was healthy – larger than at the same time a year ago.
The outlook was favorable with the company stating that the medium-term macro environment for shipping is favorable as demand / supply dynamics are set to improve post pandemic.
“The Board remains confident in both the outlook for shipping, offshore and renewables markets and, indeed, in the Group itself,” the company said.
Given the positive medium-term outlook and the strong order book we see the insider buying here as bullish. It suggests that the Chairman believes there is more momentum in the share price to come.