12-month performance: -60% Insider activity: Bullish Insider buying pattern: large purchase from Deputy Chairman Recent news: 50% fall in stock price
Insider buying can provide valuable clues about a stock’s potential. Insiders may sell their company’s stock for many reasons. But they only buy stock for one reason – they expect it to go up. In this article, we are going to highlight recent insider buying at easyJet (EZJ:LN). EasyJet is a UK-based low-cost short-haul airline carrier that operates in more than 30 countries across Europe. The company is listed on the London Stock Exchange and currently has a market capitalisation of £2.9 billion.
An insider transaction that stands out to us at easyJet is a recent large purchase by Deputy Chairman Charles Gurassa. According to regulatory filings, the insider purchased 90,241 EZJ shares on 4 August at a price of £5.61 per share. The total cost of the trade was £499,935.
Source: 2iQ Research
A substantial purchase
This insider purchase looks interesting for a number of reasons. Firstly, it’s a substantial trade. It’s the largest insider purchase at easyJet for a number of years. Secondly, this purchase has increased Gurassa’s holding significantly. Before this trade, the Deputy Chairman only owned 18,198 EZJ shares. Now, he owns 108,439 shares. This suggests he’s confident the stock will rise. Finally, Gurassa has considerable industry experience. Not only has he served as easyJet’s Deputy Chairman since 2011, but he has also served as CEO of Thomson Travel Group plc and Director of Passenger and Cargo at British Airways. It’s likely that he knows the airline industry very well.
EasyJet has been severely disrupted by the coronavirus this year and as a result, its share price has fallen heavily. Year to date, the stock is down more than 50%. Clearly, Gurassa believes that it will bounce back at some stage. Of course, with so much uncertainty in relation to Covid-19, there’s no guarantee that easyJet shares will rebound any time soon. However, given the size of Gurassa’s purchase and his industry experience, we see this insider buying activity as bullish.
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