Insider transactions can provide investors with a more complete view of activity within the world’s publicly-listed companies. If insiders are buying company stock, for example, it tells us that they’re confident about the future.
In this report, we are going to highlight some insider purchases at Hugo Boss AG (BOSS:GR). Hugo Boss is a German luxury fashion house that sells clothing, footwear, accessories, and fragrances. The company is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €2.5 billion.
Hugo Boss AG: Insider Buying
Our records show that in the last month, two insiders have made substantial purchases here. Between 29 March and 1 April, CFO Yves Mueller purchased 4,200 shares, spending around €140,000 on stock. Meanwhile, between 19 March and 22 March, board member Luca Marzotta purchased 4,700 shares, spending roughly €165,000 on stock.
Previous Insider Trades Have Been Timed Well
While these are not huge insider purchases, we still see them as significant. One reason is that both insiders have made well-timed transactions in the recent past. Mueller, for example, purchased 3,000 BOSS shares at a price of €21.02 per share in October last year. Since then, the stock has risen nearly 70%. Similarly, Marzotta bought a large amount of stock in December last year when it was trading near €27. Since then, the stock has risen around 30%.
It’s also worth noting that Mueller’s purchases have increased the size of his holding by 39%. This would suggest that the insider – who became a member of the Managing Board in 2017 – is confident that the stock is set to rise.
Optimistic About the Future
In Hugo Boss’ recent full-year results, the company was optimistic about the future. While the company advised that Q1 sales are likely to be impacted by Covid-19, it said that it expects an improvement after this with sales and EBIT expected to grow “strongly” for the year.
“Although the pandemic continues to have a severe impact on our business in the short term, I am highly confident when it comes to the further recovery of our business in the course of the year. We will continue to leverage the global trend of casualization,” said CFO Yves Mueller.
On the back of this update, analysts at Baader Helvea upgraded the stock to ‘add’ from ‘reduce’ and raised their price target by 80% to €36. They believe that performance is likely to improve significantly over the next few months on the back of the global vaccination program and store re-openings. They also believe incoming CEO Daniel Grieder is likely to bring "the right competences and fresh ideas to the table" to improve the group's brand perception.
In light of these developments, we see the insider activity here as bullish.