Corporate executives and directors have the most up-to-date information on their companies. If these insiders are buying stock, it’s often worth taking a closer look.
In this report, we are going to highlight some interesting insider buying at E.ON SE (EOAN:GR). E.ON is an international energy supplier based in Essen, Germany. The company – which has a strong focus on renewable energy solutions – is one of the largest European operators of energy grids. It is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €27.6 billion.
E.ON: Insider Buying
Our data shows that on 12 May, E.ON’s CEO Leonhard Birnbaum – who has been a member of the board of management since 2013 – purchased 84,267 EOAN shares at a price of €10.70 per share. This transaction cost the insider €902,000. On the same day, Supervisory Board member Andreas Schmitz – a financial expert with expertise in financial analysis and planning – purchased 14,200 shares at a price of €10.69 per share. This transaction cost the insider €152,000.
This insider activity stands out for two reasons. Firstly, the purchases are substantial in size. Our data shows that this buying activity represents the largest amount of insider buying within a quarter since Q2 2019.
Secondly, both insiders have increased the size of their holdings significantly. Our data shows that Birnbaum’s purchase has increased the size of his holding by 63% while Schmitz’s trade has increased the size of his holding by 71%. This suggests that the two insiders are confident the stock is undervalued at present.
Good Start to 2021
E.ON recently posted an encouraging set of first-quarter results. For the period, group adjusted EBIT was up 14% to €1.7 billion, while adjusted net income was up 19% to €809 million. First-quarter adjusted EBIT in the group’s British retail unit, which includes the former Npower unit it bought as part of the takeover of Innogy, came in at €84 million compared with a €2 million loss in Q1 2020.
“We’re off to a successful start in the new year. All our businesses delivered a strong operational performance in the first quarter. This gives us a lot of confidence for the remainder of the year,” said CFO Marc Spieker.
Looking ahead, the company stuck to its 2021 outlook. It advised that it expects to achieve all its targets for 2021 and its medium-term earnings plan through 2023, including its dividend promise.
“We’re very confident that we’ll achieve our adjusted EBITDA target of €7.2 to €7.5 billion and our adjusted EBIT target of €3.8 to €4 billion for the 2021 financial year,” said Spieker. “I can therefore fully affirm our forecast for 2021, our medium-term financial and earnings plan, and our dividend promise,” he added.
In light of these results, we see the insider buying here as bullish.