A CEO has deeper insight into their company’s operations than any outside analyst or fund manager could ever hope to obtain. If they’re buying company stock, it’s worth taking a closer look. Put simply, these insiders are the smart money.
In this report, we are going to highlight a large CEO purchase at Delivery Hero AG (DHER:GR). Delivery Hero operates the largest global food delivery network (outside of China). Operating in 50 markets, it provides delivery services in over 700 cites. The company is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €27.7 billion.
€5 Million CEO Purchase
Our records show that on 18 March, Delivery Hero’s CEO Niklas Östberg purchased 46,750 shares at a price €107.05 per share. This purchase cost the insider just over €5 million.
The First Insider Purchase Since the IPO
This transaction stands out because it is the first purchase from an insider since the company listed on Deutsche Börse’s Xetra back in 2017. Our data shows that up to now, all insider transactions have been sales.
It’s also worth noting that Niklas Östberg is the co-founder of Delivery Hero. This means he is likely to have a high level of information on the company and its future prospects.
Huge Growth in 2020
Delivery Hero's strong growth continued in the fourth quarter of 2020 with orders almost doubling year on year to €423 million. In Europe and the Americas, GMV increased by 87% and 136% respectively on a constant currency basis. Meanwhile, in Asia, Q4 orders almost matched orders for the whole of 2019. Overall, orders for the full year reached 1.3 billion, representing an increase of 96% year on year.
"We had a strong final quarter in a year that has been exceptional in many ways. Moving into 2021, I'm confident that we will continue our success story and execute on our ambition to deliver anything, locally," said Niklas Östberg.
Despite these strong Q4 results, the stock has pulled back recently, due to the tech sell-off. Since mid-February, Delivery Hero’s share price has fallen from around €130 to €110.
The purchase from CEO Niklas Östberg suggests that he expects the stock to bounce back. We see this insider trade as a bullish signal.