One of the most bullish signals in insider transaction analysis is ‘cluster buying.’ This is where three or more insiders at the same company have purchased stock within a short period of time.
In this report, we are going to highlight some recent cluster buying at Holcim Ltd (HOLN:SW). Holcim is a leading provider of sustainable building solutions. The company operates four business segments: Cement, Aggregates, Ready-Mix Concrete and Solutions & Products, and holds leading positions in all regions of the globe. It’s listed on the SIX Swiss Exchange and currently has a market capitalization of CHF 28.4 billion.
Holcim: Insider Buying
Our insider transaction data shows that between 13 September and 16 September, five insiders at Holcim, including the CEO and CFO, bought stock. In total, the five insiders picked up 15,000 shares, spending around CHF 720,000 on the stock. The largest purchase was from CEO Jan Jenisch, who added 10,000 shares at a price of CHF 48.34 per share.
This cluster buying activity looks quite bullish, in our view. The reason we say this is that the cluster involves several top-level insiders such as CEO Jan Jenisch, CFO Geraldine Picard, Region Head Asia Pacific Martin Kriegner, and Region Head EMEA Miljan Gutovic. All of these insiders are likely to have an in-depth understanding of Holcim’s operations and performance. The large purchase from the CEO also suggests that he is very confident the stock is set to rise.
Holcim posted record H1 results in late July.
For the period, net sales came in at CHF 12.6 billion, up 16.6% on a like-for-like basis, while net income came in at CHF 839 million versus CHF 347 million in the H1 2020. The increase in sales was driven by volume growth in all regions and segments. Free cash flow was a record CHF 814 million.
Looking ahead, Holcim said it expects the growth momentum to continue in all regions, supported by various stimulus programs. And on the back of the strong H1 results, it raised its full-year guidance. It now expects to achieve recurring EBIT growth of at least 18% versus the previous guidance of 10%. It also expects to achieve its 2022 targets one year early.
In light of these strong results and the increase in guidance, we see the cluster buying here as a bullish indicator.