Insiders have access to real-time information on their companies and often also have a wealth of experience that can help them evaluate their firms’ prospects. If they are buying company stock, it’s generally worth taking a closer look.
Here, we are going to highlight some interesting insider buying at Entravision Communications (EVC:US). Entravision Communications is a US-based media company that mainly focuses on Spanish speaking Hispanic communities within America as well as in other countries. It owns television stations, radio stations, and outdoor media, and has sales offices in 55 different countries. It’s listed on the New York Exchange and currently has a market capitalization of $417 million.
Entravision Communications: Insider Buying
Our insider transaction data shows that between May 17 and May 19, a director at Entravision Communications, Paul Zevnik, purchased 200,000 EVC shares at an average price of $4.99 per share. This purchase cost the insider around $1 million and increased his holding in the company by over 250%.
We see this insider buying as interesting for two reasons.
Firstly, Mr. Zevnik has spent a considerable amount of money on Entravision Communications stock, which suggests that he is very confident that the company’s shares are undervalued by the market. He has upped his stake by over 250%, which further creates the impression he is confident that the shares will move upward in the future.
Secondly, the insider has been at the company since 2000 and from 1989 to 1996 he was heavily involved in the development, management, and ownership of predecessor entities. This means he is likely to know the business very well.
Record Revenue for Q1
Driven by a strong digital performance, Entravision Communications recently produced its best ever revenue and EBITDA results for the first quarter.
Net revenue for Q1 was $197.2 million which was up 32% year over year. Meanwhile, adjusted EBITDA jumped to $18.1 million which was an increase of 28% on Q1 2021. Operating cash flow was 127% higher than a year before. As a result of this solid performance, the company was able to repurchase $7.1 million worth of shares under its $20 million repurchasing program.
“Our strength during the first quarter was largely driven by revenue growth of 51% in our digital segment, which comprised 78% of consolidated revenue. Our broadcast businesses, and, in particular, audio, helped drive our strong margins and cash flow. Simultaneously, our strategic expansion of our commercial partnerships with some of the world’s leading technology platforms has positioned us at the forefront of digital innovation across emerging economies. We are excited about the enormous opportunities that lie in front of us and look forward to sharing our progress throughout the year," said Walter Ulloa, Chairman and CEO.
On the back of a very solid set of Q1 results and the buoyant outlook for the business, we have taken the view that the recent insider buying at Entravision Communications is a bullish event. The large buy from the director suggests that he strongly believes the shares are trading below their true value at present.