Top-level corporate insiders such as CEOs and CFOs tend to have the most up-to-date information on their businesses. If they’re buying company stock, it’s generally a sign that the outlook for the stock is attractive.
Here, we are going to highlight a CEO purchase at Future PLC (FUTR:LN). Future publishes a number of specialist magazines both in print form and digitally, predominantly in the US and the UK. The company also has a media segment and provides offerings such as a price comparison service, digital advertising, events, and digital licensing services. It is traded on the London Stock Exchange and currently has a market capitalization of £3.4 billion.
Future PLC: Insider Buying
Our insider transaction data shows that on February 3, the CEO of Future, Zillah Byng-Thorne, purchased 7,427 FUTR shares at a price of £31.42 per share. This purchase cost the insider just under £250,000 (just over $300,000).
Impressive Track Record
This insider purchase is worth highlighting for a couple of reasons.
Firstly, our insider transaction data shows that the CEO picked up Future stock at the end of 2020 at levels 50% below where the stock is now trading. This suggests she is adept at picking her trading levels well. It’s interesting to see that there was no insider buying at the company during 2021, however, after a small pullback in the share price this year, the insider has snapped up stock. This suggests the CEO believes the market is now undervaluing her company.
Secondly, Mrs. Byng-Thorne has orchestrated an impressive turnaround at the company. She has now held the position of CEO for seven years and is therefore likely to have deep insight into the company’s operations and prospects.
Continued Margin Progression
Future’s trading update for the four months ending 31 January 2022, showed that the business is performing well right now.
The company recently raised guidance for full-year 2021 and it expects to continue to improve margins in 2022. It is benefiting from the continued momentum in digital advertising, which is seeing impressive growth. Cash conversion continues to be strong.
Dennis Publishing, acquired at the start of October in a £300 million deal, is expected to be integrated into the business by the end of March.
“Good momentum in digital advertising is being driven by the strength of our trusted content which continues to attract a high value audience making us a partner of choice for advertisers. Our diversified strategy positions us well to continue our strong growth momentum and we are pleased to reiterate our recently upgraded guidance for the full year,” said Ms. Byng-Thorne.
Having read this update, we have taken the view that the recent insider buying at the company is bullish. Mrs. Byng-Thorne continues to believe that the positive momentum at Future will continue to build and in buying company shares recently, she is indicating that she thinks the market is underestimating the true value of the business.