When a top-level insider buys company stock, it’s often worth taking a closer look. It’s not a stretch to say that these individuals are some of the most informed participants in the market.
In this report, we are going to highlight some interesting insider buying activity at Einhell Germany AG (EIN3:GR). Einhell is a manufacturer of manually-operated, petrol-operated, and electronic tools, electrical tool accessories, metal and plastic gardening and leisure products, and air-conditioning and heating products. Founded in 1964, it currently has operations in over 40 countries worldwide. The company is listed on Deutsche Börse’s Xetra and has a market capitalization of €262 million at present.
Einhell Germany: Insider Buying
Our data shows that since late April, Einhell’s Chairman of the Executive Board Andreas Kroiss has purchased stock on five occasions. In total, the insider has purchased 5,500 shares, spending about €740,000 on the stock.
An Experienced Insider
This insider trading activity stands out for a couple of reasons. Firstly, these purchases represent the largest amount of buying within a quarter from the Chairman for over five years. This suggests that the insider is very confident in relation to the outlook for the stock.
Secondly, Mr Kroiss has significant company experience. He has been Chairman of the Executive Board since 2003 and before this was CEO of the company’s Austrian subsidiary. Given this experience, it’s fair to assume that he knows the company very well.
60% Dividend Increase
Einhell recently registered its best full-year results in the company’s history on the back of the success of its rechargeable battery strategy. For fiscal 2020, revenue was up 20% to €724.7 million while group earnings before tax were up by 74% to €56.4 million. On the back of these results, the company increased its dividend payout by almost 60% to €8.2 million.
The company’s first-quarter 2021 results, posted on 21 April, showed further strong growth. For the three-month period ended 31 March, the group generated revenues of €229.6 million, compared to €154.9 million in Q1 2020. Growth in sales was achieved in all of the group's relevant markets, driven by strong demand for the company’s cordless Power X-Change devices.
In light of this momentum, we see the insider buying here as bullish. It suggests that the Chairman is confident about the future and that he believes the stock is set to move higher.