Top-level corporate executives tend to have the most up-to-date information on their companies’ operating activities. If these insiders are buying company stock, it’s usually a sign that business performance is strong and that the outlook for the stock is positive.
In this report, we are going to highlight a CEO purchase at HELMA Eigenheimbau AG (H5E:GR). HELMA Eigenheimbau is a German real estate company that is engaged in the development, planning, sale, and construction management of individually-planned detached houses. Since the group was founded in 1980, it has delivered over 10,000 residential and holiday properties to customers. The company is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €223 million.
HELMA Eigenheimbau: insider buying
Our insider transaction data shows that on 16 June 2021, CEO Gerrit Janssen bought 4,000 H5E shares at a price of €52.12 per share. This purchase – which cost the insider €208,480 – increased his holding to 11,500 shares.
This trade is worth highlighting for a couple of reasons. Firstly, it is substantial in size. Our records show that it is the largest insider purchase at HELMA Eigenheimbau for several years.
Secondly, it has increased the size of Mr. Janssen’s holding by a significant 53%. This suggests that the insider is very confident that the stock is undervalued at present.
It’s worth noting that Mr. Janssen has substantial company experience. He has been a member of the Management Board since July 2009 and assumed the role of the Chairman of the company's Management Board (CEO) on 6 July 2018. He also has financial markets experience. After graduating, Mr. Janssen – who is a Chartered Financial Analyst (CFA) Charterholder – served at a Hamburg-based management consultancy specializing in capital market advisory. So, he is likely to have a good understanding of his company’s prospects and the stock’s potential.
Strong growth expected
In March, HELMA Eigenheimbau advised that, going forward, it expects to see “significant revenue and earnings growth” on the back of record new order intake achieved in 2020, its well-filled project pipeline, and promising growth trends in the market for residential and holiday properties.
For the 2021 financial year, the group expects to achieve revenue of between €300.0 million and €310.0 million (2020: €274.0 million) and consolidated EBT of between €25.0 million and €26.0 million (2020: €22.5 million).
Meanwhile, looking further out, it expects consolidated revenue to rise to more than €400.0 million by 2024. The company advised that its aim is to continuously increase profitability to an EBT margin of over 10.0% (2020: 8.2%).
In light of these growth forecasts, we see the insider buying here as a bullish indicator.