Corporate insiders tend to have superior knowledge of their firms’ operating, financing, and investing activities. If they’re buying company stock, it’s often worth taking a closer look.
In this report, we are going to highlight some interesting insider buying at General Motors (GM:US). General Motors is one of the largest automotive companies in the world. Headquartered in Detroit, USA, it produces vehicles in around 30 countries worldwide. The company is listed on the New York Stock Exchange and currently has a market capitalization of $70.9 billion.
General Motors Co: Insider Buying
Our data shows that on February 10, board member Patricia Russo picked up 6,000 GM shares at a price of $50.61 per share. This trade cost the insider $303,660 and increased her holding to 31,000 shares.
Lead Independent Director
Ms. Russo has considerable company experience. Previously, she was lead independent lead director of the GM Board of Directors from March 2010 to January 2014. And she is set to be lead independent director again, following Theodore Solso's retirement. This background means she is likely to know the company well.
What stands out about this trade from Ms. Russo is that it is large both in nominal and relative terms. Our data shows that it has increased the size of her holding by 24%. The fact that the insider has boosted her stake by such a substantial percentage suggests that she is confident the stock is set to move higher.
Electric Vehicle Push
General Motors recently posted a solid set of full-year results for 2021.
For the year, the group generated net income of $10 billion, EBIT-adjusted of $14.3 billion, and adjusted diluted EPS of $7.07. These figures, up 4%, 47%, and 44% respectively, were all new records.
Looking ahead, the future looks exciting for GM as in 2022, it’s planning a six-fold increase in electric truck and SUV production. New details shared with suppliers indicate that the group intends to increase production of its electric trucks and a new electric Cadillac SUV to a total of 46,000 vehicles this year, up from a previous plan to build just 7,000 of those vehicles in 2022. Meanwhile, GM Chief Executive Mary Barra recently told investors that the automaker intends to accelerate production of electric vehicles and deliver 400,000 EVs in North America during 2022 and 2023.
In light of these solid results, and the plans to boost EV production, we see the insider buying here as a bullish indicator.