One of the most bullish signals in insider transaction analysis is ‘cluster buying.’ This is where three or more insiders at the same company are simultaneously purchasing stock.
In this report, we are going to highlight some interesting cluster buying at FlatexDEGIRO AG (FTK:GR). FlatexDEGIRO is a European FinTech company that specializes in securities trading and transaction processing. The company 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 €1.8 billion.
FlatexDEGIRO: Insider Buying
Our data shows that between January 24 and January 25, three top-level insiders bought stock at prices of between €16.50 and €16.72 per share. Those who snapped up shares were:
- CEO Frank Niehage
- CFO Muhamad Said Chahrour
- Chairman Martin Korbmacher
Combined, the insiders spent around €400,000 on stock.
It’s worth noting that both the CEO and the CFO also made a number of purchases earlier in the month. Overall, insiders spent more than €900,000 on FTK stock during January.
This cluster of purchases is worth highlighting due to the fact that all three insiders involved in the cluster are top-level insiders. All three are likely to know the company very well and have an excellent understanding of its prospects.
Additionally, all three have significant investment management experience. Previously, Mr. Niehage was Managing Director at Goldman Sachs and CEO at Bank Sarasin AG. Meanwhile, Mr. Chahrour previously worked in M&A and Transaction Services at UBS and PWC where he managed multiple transactions with a total deal volume of more than €2 billion. As for Mr. Korbmacher, he previously worked at JP Morgan where he served as Head of Trading, and Dresdner Kleinwort where he served as Global Head of Fixed Income Trading and Global Head of Equities. Given their backgrounds, it’s fair to assume that these insiders know what they are doing here.
FlatexDEGIRO stock has experienced a significant pullback over the last six months on the back of the global shift out of high-growth stocks. Back in July, FTK stock was trading near €30. Today, however, it’s near €17.
Yet results show that the company continues to grow rapidly. In 2021, for example, customer accounts grew 55% to 2.06 million. Meanwhile, the group registered 91.0 million settled transactions, up 21% year on year.
Looking ahead, management expects further growth. For 2022, it expects to hit 2.7 million to 2.9 million accounts and settle 95 million to 115 million transactions.
“In 2021, we have marked another record year. Even more important, we have also laid the foundations for future exponential customer growth. We have invested heavily into IT to offer highest stability and security on our platform, while further enhancing the usability and relevance of our trading app with the launch of next 3.0”, said CEO Frank Niehage in a recent trading update.
Given the level of growth here and the outlook for 2022, we see the insider buying as a bullish indicator. It suggests that those at the top of the company are very confident about the future.