Top-level company executives tend to have an information advantage over other investors. If these insiders are buying their own company stock, it’s often a bullish signal.
Here, we are going to highlight an insider purchase at Dixons Carphone PLC (DC/:LN). Dixons Carphone is a retailer that specializes in electronics and mobile telephones. The company’s biggest markets are the UK and Ireland, the Nordic regions and Greece. As well as selling its primary products, Dixons Carphone also offers ancillary services connected to them such as insurance and repairs. It’s traded on the London Stock Exchange and currently has a market capitalization of £1.48 billion.
Dixons Carphone PLC: Insider Buying
Regulatory filings show that on 22 July, the Deputy Chairman of Dixons Carphone, Antonio DeNunzio, purchased 80,000 DC/ shares at a price of £1.22 per share. This purchase cost the insider around £100,000 and increased his holding by 40%.
This trade caught our attention as Mr. DeNunzio’s purchase of DC/ shares has increased the size of his holding by a significant percentage. This suggests that he is extremely confident that the share price will continue to head in an upward direction.
Additionally, Mr. DeNunzio has a wealth of experience in the European retail sector. His roles have included the position of President and Chief Executive at Asda, Chairman of Pets at Home, and he was a Non-Exec at Alliance Boots. He is a Senior Adviser to the global investment firm Kohlberg Kravis Roberts which means he is likely to be adept at making investment decisions.
Positive Full-year Results
Dixons Carphone recently produced a strong set of full-year results, especially given that their physical stores had to close for long periods of time, due to Covid-19. For the year to 1 May, electrical sales online grew by 103% to £4.7 billion. This meant that the group was able to make adjusted profit before tax of £156 million which was up on the previous year’s figure of £116 million. The group statutory profit before tax for the year was £33 million versus a loss of £140 million in the year prior. The balance sheet moved to a healthy position with the company sitting on net cash of £169 million against a net debt of £204 million in the previous year. This has allowed the company to restore the dividend.
Looking ahead, management was confident in relation to the outlook. “The start of the financial year has seen continued strong trading in all our markets and I’m more confident than ever in our prospects,” said Alex Baldock, CEO of Dixon Carphone.
Given the upbeat comments on the outlook for the company and the impressive results, we see the insider trading at the company as bullish. It would suggest that the insider is confident on the future prospects of the company and that he believes there is more upside in the share price to come.