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 insider buying from top-level insiders at Getinge AB (GETIB:SS). Getinge is a global medical technology company that is based in Sweden. The business is split into three segments – Acute Care Therapies, Life Science, and Surgical Workflows. It’s listed on the Nasdaq Stockholm Stock Exchange and currently has a market capitalization of SEK 104.9 billion.
Getinge AB: Insider Buying
Our insider transaction data shows that on December 9, two key insiders at Getinge AB bought stock. Those who picked up shares were:
- President and CEO Mattias Perjos (5,000 shares @ SEK 384.17 per share)
- CFO Lars Sandstrom (1,200 shares @ SEK 389.13 per share).
Combined, the two insiders spent around SEK 2.4 million (approx. USD $220,000) on Getinge stock.
Key Insiders Picking Up Stock
This insider buying is interesting for a couple of reasons.
Firstly, it is significant that the CEO and the CFO are buying shares in tandem. Both are key players within the company who shape the business strategy and ultimately make the decisions that have a large bearing on the company’s performance. They are likely to know the business very well.
Secondly, both Mr. Perjos and Mr. Sandstrom have impressive experience in the business world. Mr. Perjos was the CEO at engineering firm Flexlink for ten years and before joining Getinge in 2017, he was CEO at Coesia International for five years. Meanwhile, Mr. Sandstrom was previously Senior Vice President Group Reporting, Tax and Control within the Volvo Group. He also held several senior positions at Scania prior to joining Volvo, such as Head of Group Financial Reporting and Head of Group Reporting and Control. Their employment history suggests that both insiders are likely to have the acumen to make sound investment decisions.
Strong Order Book
Getinge performed strongly during the third quarter throughout all of its business areas and regions.
Order growth was very strong with the company seeing organic order intake grow by more than 20% in Q3. While sales were down year on year due to tough comparatives, when compared with Q3 2019, sales rose significantly due to high demand for many of the company’s products. Profit before tax of SEK 3.112 billion for the nine months up until the end of September was ahead of the SEK 2.944 billion the company made in the year prior.
“Our cash flow remains strong, meaning that we have strengthened our solid financial position. We are continuing to implement our strategy – focusing on product development, growth and profitability – according to plan,” said Mr. Perjos.
Given these solid Q3 results and confident outlook for the business, we see these recent insider purchases of stock at Getinge as bullish. In adding to their holdings, two of the most senior insiders in the company appear to be signaling to investors that they believe the shares are undervalued.