One of the most bullish signals in insider transaction analysis is ‘cluster buying.’ This is where multiple insiders are buying company stock simultaneously.
In this report, we are going to highlight some cluster buying at FlatexDEGIRO AG (FTK:GR). FlatexDEGIRO is a European FinTech company that specializes in securities trading and transaction processing. The group operates one of the fastest-growing online brokerage businesses in Europe, executing more than 75 million paperless securities transactions per annum. It is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €2.4 billion.
FlatexDEGIRO: Insider Buying
Our insider transaction data shows that between 2 August and 5 August, three insiders at FlatexDEGIRO made purchases at prices between €83.99 and €88.48. Those who bought stock were:
- CEO Frank Niehage (8,000 shares)
- CFO Muhamad Chahrour (2,500 shares)
- Chairman Martin Korbmacher (1,554 shares)
Combined, these insiders spent around €1.05 million on FTK stock.
Bullish Cluster Buying
This cluster buying pattern is very bullish, in our view.
One reason we see it as bullish is that the cluster contains three top-level insiders. The CEO, CFO, and Chairman are all likely to have a superior understanding of business performance.
Another reason is that both the CEO and CFO have made well-timed purchases in the recent past. In March, these two insiders spent about €250,000 on FTK stock when it was trading near €75. Since then, it has risen as high as €119. It’s worth noting that our model has assigned both Mr. Niehage and Mr. Chahrour very high Trading IQ scores.
500k New Accounts
FlatexDEGIRO recently posted a very strong first-half report.
For the half, revenue increased 127% to €226.1 million while adjusted EPS increased 79.1% to €2.40. Operating cash flow was up 119.5% to €83.4 million. During the period, the group registered net customer growth of 500,000 resulting in a total customer base of 1.75 million at the end of June. Meanwhile, assets under custody increased nearly 200% to €40 billion.
Looking ahead, FlatexDEGIRO said that for the full year 2021 it expects its customer base to increase by 750,000 to 950,000 to 2.0 to 2.2 million customers. And by 2026, it aims to serve 7.0 to 8.0 million customers.
“With best- in-class products and services at most attractive prices, we are on our way to retailize online brokerage in Europe,” said CEO Frank Niehage. “In the coming months, we will launch important new product offerings and services to the benefit of our customers all over Europe, making trading and investing even more attractive for everyone. We thereby further increase our striking power on the way to market leadership in each of our growth countries in continental Europe, especially France, Spain, Portugal, Italy and Switzerland,” he added.
Since the results, the share price has pulled back. Insiders clearly see value after the pullback. We view this insider buying as a bullish indicator.