If a CEO is spending a substantial amount of money on company stock, it’s often worth taking a closer look. CEOs tend to be way ahead of analysts and portfolio managers when it comes to the performance of their companies and their stock purchases can provide valuable trading signals.
In this report, we are going to highlight a large CEO purchase at Evotec SE (EVT:GR). Evotec is a German drug discovery and development business. The company, which has a portfolio of over 200 proprietary and co-owned R&D projects, operates globally, largely through external alliances with pharmaceutical companies, academic institutions, patient advocacy groups, and venture capitalists. It is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €6.6 billion.
Evotec SE: Insider Buying
Our insider transaction data shows that on January 4, CEO Werner Lanthaler bought 10,000 EVT shares at a price of €39.25 per share. This trade cost the insider €392,500 and increased his holding to 1.312 million shares.
This trade caught our attention due to the fact that Mr. Lanthaler has made some well-timed purchases in the recent past.
In August of 2020, for example, he picked up 20,000 shares at a price of €21.70 per share. Over the next six months, the stock rose about 70%.
Before this, he picked up 10,000 shares in September 2019 at a price of €19 per share. Over the next five months, the stock rose about 40%.
It’s worth noting that Mr. Lanthaler has considerable company and industry experience. He has served as CEO of Evotec since 2009. And previously, he was CFO of Intercell, a global biopharmaceutical company. This experience means that he is likely to have a good understanding of his company’s prospects.
Solid Q3 Results
Evotec’s most recent results, for the third quarter of 2021, were solid.
For the period, group revenues were up 20% to €431.0 million with like-for-like revenue growth up 26%. Meanwhile, adjusted EBITDA, which was impacted by higher costs of sales ahead of the production start at its new J.POD facility and a deliberate increase in unpartnered R&D, came in at €70.1 million compared to €76.9 million a year earlier.
On the back of these results, Evotec confirmed its guidance for the full-year 2021 as well as its mid-term 2025 targets. For 2021, it expects group revenue to be in the range of € 550 – 570 million (2020: € 500.9 million) and adjusted EBITDA to be in the range of € 105 – 120 million (2020: € 106.6 million).
In light of these solid results, we see the insider buying here as a bullish indicator.