Insider Buying

Insider Buying Report: Flow Traders NV (FLOW:NA)

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Flow Traders NV
12 months:
Large CEO purchase
Solid Q3 results

Top-level corporate insiders have deep insight into their company’s operations. If they’re buying company stock, it’s generally a bullish development.

In this report, we are going to flag some interesting insider buying at Flow Traders NV (FLOW:NA). Flow Traders is an electronic liquidity provider based in the Netherlands that specializes in exchange-traded products (ETPs). The stock is listed on the Euronext - Amsterdam and currently has a market capitalization of €1.3 billion.

Flow Traders: insider buying

An insider transaction that has caught our attention here is a large purchase from CEO Dennis Dijkstra. Our records show that on 27 October, the insider purchased 30,000 FLOW shares at a price of €28.95 per share. The total cost of the transaction was €868,500.

FLOW-NA(chart)     Source: 2iQ Research

High insider IQ

This insider purchase is worth highlighting for a few reasons. Firstly, it is a substantial purchase. Our records show that it is the largest insider purchase at Flow Traders for over two years.

Secondly, Dijkstra has a good track record when it comes to the timing of his purchases and sales. After his last purchase, in July 2019, the stock rose about 40% in the next 12 months. After his last sale, in April 2018, the stock fell about 25% in the next 12 months. Our model gives the insider a high long-term trading IQ of 108.

Q3 results

Flow Traders posted a solid set of Q3 results in October. The results showed that for the nine-month period to the end of September, net trading income was €803 million, up from €170 million for the same period last year. Net profit for the nine months was €398 million, versus €46 million for the same period last year. The company advised that it continued to gain market share in both EMEA and the Americas.

Since these results, the stock has pulled back. The CEO’s purchase suggests that he sees the stock as undervalued at present. We see this large insider purchase as a bullish signal.