When multiple insiders buy company stock, it’s often worth taking a closer look. This buying pattern – which is known as ‘cluster buying’ – is a particularly bullish insider trading signal.
In this report, we are going to highlight cluster buying at Harvia Oyj (HARVIA:FH). Harvia is a leader in the sauna and spa market. The company, which employs over 500 professionals in Europe, North America, and Asia, offers a comprehensive sauna and spa product range, from heaters and their components to full sauna and spa solutions – meeting the needs of consumers and industry professionals alike. It is listed on the OMX Nordic Exchange Helsinki and currently has a market capitalization of €1.02 billion.
Harvia: Insider Buying
Our data shows that on 2 September, four insiders at Harvia, including CEO Tapio Pajuharju, purchased shares. In total, the four insiders spent around €135,000 on the stock. Mr. Pajuharju made the largest purchase, picking up 1,000 shares at a price of €51.90 per share and spending €52,000 on the stock.
Bullish Cluster Purchase
This cluster buying pattern looks quite bullish, in our view, despite the fact that the purchases are not particularly large in nominal terms. One reason we say this is that several top-level insiders have bought stock including CEO Tapio Pajuharju, Sales Director of Central Europe Markus Wormanseder, and Managing Director of EOS Group (which Harvia recently acquired) Rainer Kunz. All of these insiders are likely to have a superior level of information in relation to the company’s operational trends.
Another reason is that several of these insiders have made well-timed purchases in the recent past. Kunz, for example, picked up 34,000 shares at a price of €10.11 per share in May last year. Since then, the stock has risen to €55.
88% Rise in H1 Revenue
Harvia’s recent half-year results were very strong.
For the period, revenue was up 88.4% to €86.5 million with organic growth of 60.8%. Meanwhile, adjusted operating profit was up 154% to €24.4 million, representing 28% of revenue. Basic earnings per share came in at €0.93 versus €0.30 a year earlier. Adjusted return on capital employed for H1 was 103.4% versus 43.4% in H1 2020.
“After a robust first quarter of 2021, Harvia enjoyed an exceptionally strong demand also during the second quarter. Demand has been strong in all key markets, and despite the challenges concerning the availability of key raw materials and componentry, we have been able to supply the needed products with only minor delays,” commented CEO Tapio Pajuharju.
Looking ahead to H2, the company said it would remain fully focused on increasing the value of the average purchase, geographical expansion, and continuous improvement of productivity. It added that it continues to seek opportunities to grow in the sauna and spa market through M&A.
In light of these results, we see the cluster buy here as a bullish indicator.