One of the most bullish insider transaction patterns is ‘cluster buying.’ This is where three or more insiders have purchased company stock within a short period of time.
In this report, we are going to highlight a recent cluster buying pattern at Commerzbank AG (CBK:GR). Commerzbank is a leading German bank that serves private and small business customers and corporate clients. A major player in the financial services industry, it transacts approximately 30% of Germany’s foreign trade and is present internationally in almost 40 countries in the corporate clients’ business. The company is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €9.42 billion.
Commerzbank AG: Insider Buying
Our insider transaction data shows that on May 12, six insiders at Commerzbank bought stock at prices of between €6.10 and €6.29 per share. Those who picked up here were:
- Chairman of the Management Board and CEO Manfred Knof (16,400 shares)
- COO Jörg Oliveri del Castillo-Schulz (10,000 shares)
- CFO Bettina Orlopp (15,945 shares)
- Executive board member Thomas Schaufler (10,000 shares)
- Chief Risk Officer Marcus Chromik (16,155 shares)
- Executive board member Michael Kotzbauer (10,000 shares)
Combined, the six insiders spent about €490,000 on stock.
Bullish Cluster Buying Pattern
This buying pattern caught our attention for several reasons.
Firstly, the cluster of purchases contains buys from a number of top-level insiders including the Chairman of the Management Board/CEO, the CFO, the COO, and the Chief Risk Officer. These insiders are likely to have an intimate understanding of the business and its performance.
Secondly, the insiders have spent a considerable amount of money on stock. Our data shows that this buying activity represents the largest amount of insider buying at Commerzbank within a quarter for over five years.
Solid Q1 Results
Commerzbank recently posted a solid set of Q1 results.
For the period, revenues increased by 12% to €2.8 billion on the back of strong customer business in all operating areas. Meanwhile, net income more than doubled year on year to €298 million.
The group noted that with its strong revenues, it was able to offset the higher risk provisioning due to the significant increase in economic and geopolitical uncertainty. It added that its cost-reduction program is on target and that it remains on track to hit its full-year targets.
“The strong development of our revenues in the first quarter proves that our ‘Strategy 2024’ is working. The good start to the year has confirmed our expectation that we will generate a net result of more than €1 billion in 2022. We remain determined to pay a dividend for this year. Our strong capital basis gives us the necessary leeway for this,” commented Chairman and CEO Manfred Knof.
“We have been able to more than compensate for the currently identifiable effects resulting from the Russia-Ukraine war. This shows how robust and resilient our customer business is in these challenging times,” added CFO Bettina Orlopp.
In light of these solid results, and the fact that the group confirmed its full-year targets, we see the insider buying here as a bullish indicator.