Top-level corporate executives such as CEOs tend to have an information advantage over other investors. They have a deeper insight into their own company’s operations than any external analyst or fund manager could hope to obtain. If these insiders are buying company stock, it’s generally a bullish development.
Here, we are going to highlight a large CEO purchase at Compugroup Medical SE & CO (COP:GR). Compugroup Medical is a German company that develops and sells software and information technology services for the healthcare sector worldwide. It’s listed on the Frankfurt Stock Exchange and currently has a market capitalization of €4.3 billion.
Compugroup Medical SE & CO: Insider Buying
Regulatory filings show that on 4 January, the CEO of Compugroup Medical, Dirk Wossner, purchased 3,000 COP shares at a price of €79.27 per share. This purchase cost the insider approximately €250,000.
Insider Buying Pattern
This CEO purchase looks interesting for two main reasons. Firstly, this is a substantial purchase from the insider, which is what we like to see. Our data indicates that this is the largest insider purchase at Compugroup Medical in over two years.
Secondly, we have observed purchases from other insiders here in recent months. Our data shows that both the CFO and a member of the Executive Board bought stock in early December. The CEO purchase further strengthens the impression that insider sentiment within Compugroup Medical is positive.
Compugroup Medical has seen strong momentum in recent months. Guidance for 2020 was raised in August and a December trading update stated that the company expects further progress into 2021. It now expects “very strong revenue growth of around 20%” versus the midpoint guidance of 12% in 2020. Organic growth is expected to be 5%. The company believes that it will hit revenue of €1 billion and will look to invest to drive growth further.
Given this positive news, we see the insider buying here as a bullish signal. It suggests that the CEO believes there is upside in the share price currently.