Corporate executives have the most up-to-date information on their companies' prospects. Knowledgeable in relation to the latest sales trends and order backlogs, these insiders are way ahead of portfolio managers and analysts when it comes to insight into future growth.
With that in mind, today we are going to highlight recent insider buying at Harley-Davidson Inc (HOG:US). Harley-Davidson Inc is the parent company of Harley-Davidson Motor Company (HDMC), which manufactures and sells an expansive range of distinctive motorcycles, as well as motorcycle parts, accessories, general merchandise, and related services. The company is listed on the New York Stock Exchange and currently has a market capitalisation of $4.3 billion.
Insider buying: large CEO purchase
An insider transaction at Harley-Davidson that looks interesting to us is a recent purchase by CEO and President Jochen Zeitz. According to Form 4 filings, on 12 August, the CEO purchased 71,450 HOG shares at a price of $27.86 per share. The total cost of the trade was $1.99 million.
Source: 2iQ Research
Zeitz’s last trade was timed well
This CEO purchase stands out to us for two reasons.
Firstly, it’s a large trade, both in nominal and relative terms. This purchase has boosted the CEO’s holding from 151,470 shares to 222,920 shares – an increase of 47%. This suggests he’s confident about the future.
Secondly, Zeitz’s last trade was timed very well. The last time he bought HOG shares, on 8 May (97,850 shares @ $21.26), the stock rose about 30% in the next three months.
Sales are rising
Harley-Davidson reported a disappointing set of Q2 results in late July. As a result of the coronavirus, retail sales in the US, its biggest market, plunged 27% year-on-year. Meanwhile, the group reported a loss of 60 cents per share for the quarter, compared to a profit of $1.23 per share a year ago.
However, on a conference call with analysts, management said that sales have increased sequentially since April. The company also advised that it is benefiting from interest in auto activities sparked by Covid-19.
Having just spent $2 million on stock, Zeitz clearly believes that the company can rebound from the recent Covid-19 disruptions. All things considered, we see this CEO purchase as a bullish signal.