Company executives and directors are some of the most informed participants in the market and research shows that their trading activity can provide powerful return signals. If these insiders are buying stock, it’s often worth taking a closer look.
In this report, we are going to highlight some interesting insider buying at GB Group PLC (GBG:LN). GB Group is a UK-based technology company that focuses on identity management. The group helps businesses quickly validate and verify the identity and location of their customers with solutions that make use of machine learning, facial recognition, and other cutting-edge technologies. The company is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and currently has a market capitalization of £1.6 billion.
GB Group: Insider Buying
Our insider transaction data shows that recently, two insiders at GB Group have purchased stock. On 21 June, Chairman David Rasche bought 10,000 shares at a price of £8.34 per share, spending £83,400 on stock. On the same day, board member Elizabeth Catchpole picked up 4,700 shares at a price of £8.40 per share, spending just under £40,000 on stock.
This trading activity stands out for two reasons. Firstly, our data shows that this is the first time that multiple insiders at GB Group have made open-market purchases within a short period of time in several years.
Secondly, Mr. Rasche has a strong buying track record. Our records show that he last bought stock in March last year when it was trading near £5. Since then, it has risen as high as £9.80. He also picked up stock in 2017 and 2016 at much lower levels.
It’s worth noting that Mr. Rasche has considerable industry and company experience. Previously, he was the founder of SSP Holdings Limited, which became one of the largest specialist insurance software houses in the world. In total, he has over 45 years’ IT industry experience with over 35 years at Board level in the software and services sectors. He was appointed to GB’s board in September 2010.
Strong Full-Year Results
GB Group produced a strong set of full-year results on 15 June that were ahead of original market expectations. For the financial year ended 31 March 2021, revenue came in at £217.7 million, up 9.3% year on year, while adjusted operating profit was £57.9 million, up 20.8% year on year. Adjusted basic earnings per share were up 15.6% year on year to 25.2p.
"Today we report a record financial performance together with our best ever customer and team member engagement scores. In the fast-changing global economic environment this is an excellent outcome,” commented CEO Chris Clark.
Looking ahead, management was optimistic about the future. “What is clear is the pandemic has accelerated company digitalization initiatives and permanently shifted consumer activity online, creating a long-term demand environment for all three of our solution sets. The services we offer have proven to be mission critical to customers within both traditional and new industries and I am excited by the prospect of continuing to broaden our customer base geographically and across sectors,” said Mr. Clark.
“With market momentum, we expect to maintain good progress in FY22 and into the future,” added Mr. Rasche.
In light of these results and the positive outlook, we see the insider buying here as a bullish indicator.