If multiple insiders have bought company stock within a short period of time, it’s often worth taking a closer look. This insider buying pattern – which is called ‘cluster buying’ – is a particularly strong insider trading signal.
In this report, we are going to highlight a cluster buy at Docebo Inc (DCBO:CN). Docebo is a Canadian technology company that offers an e-learning platform powered by artificial intelligence. This platform allows customers to take control of online delivery of their desired training and retain institutional knowledge with real time tracking of training results. The company is listed on the Toronto Stock Exchange and the NASDAQ Global Select Market and currently has a market capitalization of CAD $1.7 billion.
Docebo Inc: Insider Buying
Our records show that between 24-25 March, three insiders at Docebo purchased stock in a cluster buying pattern. On 24 March, CFO Ian Kidson purchased 6,250 shares, spending $247,931 on stock. Then, on 25 March, Chief Revenue Officer Alessio Artuffo bought 6,430 shares, spending $251,927, while board member William Anderson bought 5,500 shares, spending $213,051. Combined, these three insiders spent around $713,000 on company stock in the space of two days.
Bullish Cluster Buy
This cluster buy is worth highlighting for a few reasons. Firstly, the insiders have bought a considerable amount of stock. Our data shows that these purchases represent the largest amount of insider buying at Docebo within a quarter for several years. This would suggest that they are very confident the stock is undervalued.
Secondly, two of these insiders are top-level insiders. Both Mr. Kidson – who has been CFO since January 2019 – and Mr. Artuffo – who has served as the Chief Revenue Officer since 2012 – are likely to have a good read on the company’s recent performance and future prospects.
Strong Q4 Growth
Docebo's recent fourth-quarter results showed that the company continues to grow at a rapid rate. For the quarter, revenue came in at $18.8 million, an increase of 53% from the comparative period in the prior year, while subscription revenue came in at $16.7 million, representing 89% of total revenue, and an increase of 49% from the comparative period in the prior year. Meanwhile, the company generated positive adjusted EBITDA of $0.5 million, or 3% of revenue, compared to ($1.0) million, or (8%) of revenue, for the comparative period in the prior year
“The challenges of the pandemic have accelerated a long-term trend towards the adoption of digital learning tools in the enterprise. Companies around the world, and individual departments within, are increasingly turning to Docebo to train their internal employees, partners, and customers,” said Claudio Erba, CEO and Founder of Docebo.
Despite the strong Q4 results, the company’s share price has fallen recently, caught up in the tech sell-off.
Clearly, these insiders view the share price weakness as a buying opportunity. We see this insider buying as a bullish signal.