Insiders are some of the most informed participants in the market. If they’re buying company stock, it’s generally a bullish signal.
In this report, we are going to highlight some interesting insider buying at Flow Traders NV (FLOW:NA). Flow Traders is an electronic liquidity provider that specializes in exchange-traded products (ETPs). Through its technology platform, the company provides bid and ask prices for thousands of ETP listings. It is listed on the Euronext Amsterdam stock exchange and currently has a market capitalization of €1.7 billion.
Flow Traders: Insider Buying
Our insider transaction data show that this month, two insiders at Flow Traders have purchased stock. On 14 May, CEO Dennis Dijkstra bought 25,000 shares at a price of €33.96 per share, spending €849,000 on stock. On the same day, Chief Trading Officer Folkert Joling bought 14,817 shares at a price of €33.86, spending €501,704 on the stock.
This insider activity stands out for a couple of reasons. Firstly, Dijkstra and Joling are both top-level insiders. They are likely to have an in-depth understanding of the company, and its prospects. So, these trades have significant informational value.
Secondly, both of these insiders have timed purchases well in the recent past. In late October, Dijkstra purchased 30,000 shares at a price of €28.95. Meanwhile, in mid-November, Joling added 10,000 shares at a price of €26.04. Since then, the company’s share price has risen to €36.30, delivering solid profits for these insiders.
Strong Trading Performance
Flow Traders saw a strong trading performance across the board in the first quarter of 2021 with all desks and regions contributing to performance. While net trading income of €142.2 million was well down on last year’s Q1 figure of €495 million due to the elevated trading volumes seen early last year during the coronavirus market crash, it was up 7% on the last quarter of 2020 on the back of sector rotations and the continued shift towards ESG investing. Overall, the company delivered its second-strongest ever first quarter.
During the quarter, the company completed a €25 million share buyback. It also announced an additional repurchase of shares of up to €20 million commencing on 20 April 2021 over a period of 12 months.
In light of these developments, we see the insider buying here as bullish. It suggests that the insiders expect the stock to rise from current levels.