Corporate insiders know their companies more intimately than anyone else. They also have access to real time information that outsiders are unlikely to be aware of. If they’re buying stock, it is generally a positive development.
Here, we are going to highlight insider buying at Holcim Ltd (HOLN:SW). Holcim is a global manufacturer of building materials. Headquartered in Switzerland, the company has a presence in 70 countries worldwide. It is split into four divisions – Cement, Ready-Mix Concrete, Aggregates and Solutions and Products. It’s listed on the Six Swiss Stock Exchange and currently has a market capitalization of CHF 27.4 billion.
Holcim Ltd: Insider Buying
Our insider transaction data shows that on December 12, two insiders at Holcim bought stock. Those who bought shares were:
- CEO Alexander Jenisch (20,000 shares @ CHF 44.80)
- Region Head EMEA Milijan Gutovic (1000 shares @ CHF 45.37)
In total, the two insiders spent around CHF 940,000 (approx. USD $1 million) on Holcim stock.
This insider buying is interesting for a number of reasons.
First of all, Mr. Jenisch has spent a substantial amount of money on Holcim stock. This transaction has lifted his holding by 15% which signals that he is very confident in the future prospects of the company. It is also a positive sign that another insider has bought stock alongside him. Our data also shows that a number of insiders bought stock in the middle of September which suggests there is a positive sentiment within the business and that many insiders believe the share price is below its fair value.
Secondly, both of the insiders buying stock are top-level insiders. Mr. Jenisch has been the CEO of Holcim for four years which means he is likely to know Holcim intimately. As CEO he has access to all of the real-time information within the company. Mr. Gutovic runs the EMEA region, an area he is likely to know well as he spent 13 years as Head of EMEA at Sika before joining Holcim in 2018.
Holcim saw good momentum within the business during its third quarter.
Net sales during Q3 of CHF 7.286 billion were up 5% on the prior year. The recurring EBIT figure of CHF 1.534 billion was a record for Q3 and the company revised recurring EBIT growth guidance upwards to 22% from 18% on a like-for-like basis.
The company continues to work towards becoming the global leader in innovative and sustainable building solutions, and has made nine bolt-on acquisitions already this year, two of which were made in the third quarter.
“Holcim expects growth momentum to continue in all regions with double-digit net sales growth of Firestone Building Products in 2021. The company will pursue further bolt-on acquisitions while accelerating progress towards its 2030 sustainability targets,” said the company in its Q3 outlook statement.
Having looked at this positive Q3 update and confident outlook statement, we see the recent insider buying at the company as bullish. The shares have stalled over the last twelve months and in buying Holcim stock, the two insiders are signalling that they believe the market is undervaluing the company’s shares.