Top-level corporate insiders tend to have the most up-to-date information on their businesses. If they’re buying company stock, it’s generally a sign that the outlook for the stock is attractive.
Here, we are going to highlight a purchase from a top-level insider at CVS Group PLC (CVSG:LN). CVS Group is a veterinary services provider that operates in the UK, Ireland and the Netherlands. Veterinary is split into four different divisions: small animal, equine, farm and referrals. As well as veterinary practices, the company also runs laboratories that enable it to perform diagnostic testing. Additionally, it operates crematoriums at nine different locations. CVS Group is traded on the London Stock Exchange’s AIM market and currently has a market capitalization of £1.57 billion.
CVS Group PLC: Insider Buying
Our transaction data shows that on November 25, the Chairman of the Board at CVS Group, Richard Connell, purchased 4,200 CVSG shares at a price of £22.02 per share. This purchase cost the insider just under £100,000.
Mr. Connell has been on the Board of CVS Group for fourteen years which means he is likely to know the company very well. He is a qualified Chartered Accountant, and he also has investment management experience at 3i Group, HSBC, and Invesco. This background means it is likely that Mr. Connell is skilled at making investment decisions.
It’s worth noting that our data shows that Connell made a similar purchase of CVSG stock back in April at prices 20% lower than the current levels. This indicates that he is able to pick his trading levels well.
A recent trading update from CVS Group showed that the group continued to perform strongly in the first few months of its new financial year.
For the four months to the end of October, like-for-like sales were up 12.4%, boosted by strong demand from customers. Adjusted EBITDA margin of 19.2% was 0.5% higher than the year before. Leverage remained well below 1.0x which means the company is well placed to make further investments in the future as it looks to continue to grow the business in the future.
“We continue to focus on providing the best possible care to animals through our integrated platform and to invest in our practices, improving the facilities and expanding the offering of specialist facilities and clinical procedures. The Board considers that current trading is supportive of management’s full year expectations and the Group remains well placed to deliver further growth over the longer term,” said the company.
Having looked at the trading update, we believe that the recent insider buying by Mr. Connell is bullish. After a strong run throughout the year the shares have had a slight pullback and the Chairman has taken the opportunity to add to his holding, which suggests he believes the company will continue to grow and the share price will continue to trend higher.