Corporate insiders tend to have the most information on their companies. If these individuals are buying company stock, it tells us a lot about where they believe the stock is heading next.
In this report, we are going to highlight an interesting insider purchase at CVS Group PLC (CVSG:LN). CVS Group is a UK-based provider of veterinary services. The group owns over 480 veterinary surgeries across the UK, Netherlands and Republic of Ireland and also operates diagnostics laboratories and an online dispensary. The company is listed on the London Stock Exchange and currently has a market capitalization of £1.3 billion.
CVS Group: Insider Buying
Our records show that on 6 April, Chairman Richard Connell bought 5,000 shares at a price of £18.08 per share. This purchase cost the insider £90,400.
High Trading IQ
This insider transaction stands out for a couple of reasons. Firstly, Connell – who has a background in investment management – has an excellent track record when it comes to timing his purchases well. In early 2019, for example, he purchased 20,000 shares at a price of £3.95 per share. Since then, the stock has risen over 350%. Our model gives the insider a long-term Trading IQ of a high 114.
Secondly, this is a substantial purchase for the insider. Our data shows that it is his largest purchase in more than five years. This suggests he is confident the stock is set to keep rising.
Good H1 Results
CVS Group posted a good set of first-half results on 25 March. For the six-month period ended 31 December 2020, revenue climbed 9.4% to £245.6 million while profit before tax jumped 95% to £14.8 million. Adjusted earnings per share came in at 33.3p, up 36.5% year on year.
Encouragingly, the company said that trading in the first two months of the second half of the year had continued to be strong. It also said that it remains well positioned to achieve both organic and acquisitive future growth.
“The veterinary market is undergoing growth, with increasing pet ownership and the humanization of pets leading to increased demand for veterinary services. Our focus on high clinical standards and preventative care offerings, and the breadth of our integrated model, positions us favorably to deliver further enhancement in shareholder value,” said Chairman Richard Connell.
In light of this outlook, we see the insider purchase here as a bullish signal.