Corporate insiders tend to have superior knowledge of their firms’ operating, financing, and investing activities. If they’re buying company stock, it’s generally a sign that they’re confident about the future, and that they expect the share price to rise.
In this report, we are going to highlight some interesting insider buying at Eastman Kodak Co (KODK:US). Eastman Kodak is a global technology company that is focused on commercial printing, and advanced materials and chemicals. Headquartered in Rochester, New York, it provides industry-leading hardware, software, consumers, and services to companies all around the world. It is listed on the New York Stock Exchange and currently has a market capitalization of $500.7 million.
Eastman Kodak: Insider Buying
Our insider transaction data shows that, in recent weeks, two board members at Eastman Kodak have purchased stock.
The largest purchase was from Darren Richman, who through his investment company, Kennedy Lewis Investment Management (KLIM), bought roughly 2.7 million shares between March 18 and March 21, spending about $15.5 million on stock.
Director Michael Sileck made two smaller purchases between March 23 and March 24, picking up 17,500 shares at an average price of around $6.45 per share.
What stands out to us here is the large buy from Darren Richman.
The Co-Founder and a Managing Member of KLIM, Mr. Richman is an experienced investor with a background in special situations. Previously, he served as Senior Managing Director with Blackstone from 2006 to 2016, where he focused on special situation and opportunistic investments, and he sat on the Investment Committee for GSO Capital Partners’ (now Blackstone Credit) opportunistic credit funds and special situation funds. Earlier in his career, he was a Vice President and Senior Special Situations Analyst at Goldman Sachs. Given his background and experience, he is likely to have a very good understanding of the intrinsic value here.
Working On New Initiatives
Eastman Kodak recently posted a solid set of results for 2021.
For the year, GAAP net income amounted to $24 million, compared with a net loss of $541 million for 2020. Meanwhile, operational EBITDA was $11 million, versus negative $1 million a year earlier. Encouragingly, the group had a year-end cash balance of $362 million, compared with $196 million at the end of 2020.
It was the company’s earnings call, however, that was the most interesting. Here, Executive Chairman Jim Continenza explained that the group is working on new initiatives within its Advanced Materials and Chemicals (AMC) division to leverage its deep expertise in chemistry, and strength in layering and coating on multiple substrates. These new initiatives, which are in various stages of commercialization, include EV/energy storage battery material manufacturing. The company added that it will continue to explore opportunities in this space.
In light of these developments, we see the insider buying here as a bullish indicator. It suggests that the board members see value in the stock at present.