When top-level insiders are buying shares in their own companies, it’s often worth taking a closer look. These insiders tend to have superior knowledge about their firms’ operating activities meaning that their trades can provide clues about future stock performance.
In this report, we are going to highlight some interesting insider buying at Duerr AG (DUR:GR). Duerr is a leading mechanical and plant engineering firm that specializes in automation and digitalization. The company operates in 33 countries, serving customers in a range of industries including the automotive, mechanical engineering, chemical, pharmaceutical, and medical technology industries. It is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €2.3 billion.
Duerr AG: insider buying
Our data shows that on 9 June, Duerr’s Deputy CEO Jochen Weyrauch bought 4,500 DUE shares at a price of €34.09 per share. This purchase – which cost the insider €153,405 – lifted his holding to 11,500 shares from 7,000 shares.
This trade stands out for a couple of reasons. Firstly, it is substantial in size. Our records show that it is the largest insider purchase at Duerr for several years.
Secondly, it has increased the size of Weyrauch’s holding by 64%. This indicates that the insider is very confident that the stock is set to move higher.
It’s also worth noting that CFO Dietmar Heinrich has purchased stock as well recently, in March and May. So, Weyrauch is not the only insider who believes the company’s share price is set to rise.
A good start in 2021
In Duerr’s first-quarter results, the company advised that it is off to a good start in 2021 on the back of strength in its woodworking machinery and automotive divisions. For the period, the company registered order intake of €1.0 billion, up 23% year on year, while orders on hand reached a record figure of €2.9 billion. EBIT improved by 4.9% to €24.1 million while free cash flow came in at €65.7 million versus €45.9 million in the same period last year.
On the back of this solid performance, management said that it is confident that order intake will reach the target corridor of €3.6 billion to €3.9 billion in 2021. It noted that sales and EBIT may continue to be muted in the second quarter, however, it expects to see an improvement in the second half of the year.
“Overall, we got off to a good start to the new year. The economy is continuing to recover after last year’s coronavirus shock and we expect to see a substantial improvement in sales in the second half of the year. Earnings will continue to benefit from the measures taken to enhance efficiency,” said CEO Ralf Dieter.
In light of this update, we see the insider buying here as bullish. It indicates that the Deputy CEO is confident about the future and expects the company’s share price to rise.