Insider Buying

Insider Buying Report: Converge Technology Solutions Corp (CTS:CN)

Converge Technology Solutions Corp
(CTS:CN)
12 months:
-12.81%
Activity:
Bullish
Pattern:
Large purchase from CEO
News:
Q1 results
Converge Technology Solutions Corp
(CTS:CN)
12 months:
-12.81%
Activity:
Bullish
Pattern:
Large purchase from CEO
News:
Q1 results

If a CEO is buying shares in their own company, it’s often worth investigating the stock further. CEOs tend to have an intimate understanding of their businesses and are usually way ahead of analysts and portfolio managers when it comes to revenue and earnings trends.

In this report, we are going to highlight a large CEO buy at Converge Technology Solutions Corp (CTS:CN). Converge Technology Solutions is a Canadian IT and cloud solution provider. The company, which has operations in North America and Europe, is focused on delivering advanced analytics, application modernization, cloud, cybersecurity, digital infrastructure, and digital workplace offerings, as well as the provision of hardware and software products and solutions, to clients across various industries and organizations. It is listed on the Toronto Stock Exchange and currently has a market capitalization of CAD $1.56 billion.

Converge Technology Solutions: Insider Buying

Our data shows that between May 20 and May 24, CEO Shaun Maine purchased 180,000 CTS shares at an average price CAD $7.06. This trading activity cost the insider approximately CAD $1.27 million and increased his holding to 7.616 million shares.

The graph represents Converge Technology Solutions Corp' price history, with significant buy and sell events highlighted.

Buying From Multiple Insiders

This trading activity is worth highlighting for a couple of reasons. Firstly, Mr. Maine – who has considerable experience in the tech reselling space – has spent a considerable amount of money on stock. Our records show that this is the largest insider purchase at CTS in years. This suggests that he is very bullish on the stock right now.

Secondly, Mr. Maine is not the only insider to purchase stock here recently. Between May 12 and May 13, four board members, including Chairman Thomas Volk, picked up stock at prices of between CAD $6.00 and $6.25. This indicates that there’s a consensus of opinion within the boardroom that the stock offers value right now. Our Insider Model views this buying pattern as very bullish.

Record Quarter

Converge posted a strong set of Q1 results in May.

For the three-month period ended March 31, 2022, net revenue came in at CAD $550.0 million, an increase of 77% year on year, with organic growth of 7.2%. Meanwhile, reported adjusted EPS amounted to CAD $0.10, up from $0.08 a year earlier.

At the end of the period, the bookings backlog stood at CAD $472 million, up from $350 million at the end of 2021.

“I want to congratulate our team on a record quarter showing outstanding year-over-year growth across key financial metrics,” said Mr. Maine. “Demand was extremely strong,” he added.

Looking ahead, the CEO was confident that the group can continue to perform well.

“With now over $472 million in product backlog entering Q2, accounting for 24% of Converge’s total 2021 gross revenue, Converge is poised for strong double-digit organic growth as the supply chain normalizes,” he said.

In light of these results, and the confidence from the CEO, we see the insider buying here as a bullish indicator.

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