A CEO has deeper insight into their own company’s operations than any outside analyst or fund manager could ever hope to obtain. Therefore, if a CEO is buying company stock, investors should take note.
In this report, we are going to highlight some large CEO purchases at FastPartner AB (FPARA:SS). FastPartner is a Swedish real estate company that develops, owns and manages commercial property, primarily in Stockholm. The company is listed on the Stockholm Stock Exchange and currently has a market capitalization of SEK 16.5 billion.
FastPartner AB: insider buying
Our records show that on 10 December, FastPartner’s CEO Sven-Olof Johansson bought 200,000 preference shares. This purchase cost the insider SEK 23.1 million (approx $2.7 million). This was his second substantial purchase of preference shares since the beginning of November.
Previous insider purchases were timed well
This insider activity is significant for a couple of reasons. Firstly, the CEO has spent a substantial amount of money on company stock. Since the start of November, he has spent over SEK 55 million on stock. This suggests that he is confident about the future.
Secondly, previous insider purchases at FastPartner have been timed well. After we last flagged substantial insider buying at the company, in October 2018, the stock rose approximately 50% in the next 12 months.
New goals for 2025
FastPartner posted a solid set of Q3 results in October. For the nine-month period to the end of September, rental income increased by 8.7% to SEK 1,339.6 million while net operating income increased by 13% to SEK 968.4 million. Profit from property management increased by 13.1% to SEK 703.4 million. The rolling annual management result amounted to approximately SEK 950 million, up from SEK 875 million last year. This figure of SEK 950 million was above the company’s forecast for the full year.
As a result of these strong results, the company set new goals. Its aim is to now achieve an annual rolling profit of SEK 1,500 million by the end of 2025.
In light of these results and the company’s new goals, we see the insider buying here as bullish. Clearly, the CEO is confident about the future.