Insider buying can provide clues about a stock’s next move. Insiders sell company stock for many reasons. But they only buy for one reason – they expect it to go up.
In this report, we are going to highlight some interesting insider buying at Humble Group AB (HUMBLE:SS). Humble is a fast-moving consumer goods (FMCG) company with a focus on health and wellbeing. The group consists of 13 companies that operate in areas such as sugar reduction, functional food, and sustainable beauty and health. The company is listed on the OMX Nordic Exchange Stockholm and currently has a market capitalization of SEK 3.5 billion.
Humble Group: Insider Buying
Our insider transaction data shows that since late June, Noel Abdayem, Humble’s COO of Brands and Distribution has purchased stock on four occasions. In total, the insider has picked up 672,855 shares, spending around SEK 13.3 million (USD $1.5 million) on stock.
During this period, there have also been some smaller purchases from Deputy CEO Simon Petren (6,250 shares), and CFO Johan Lennartsson (1,000 shares).
This insider activity stands out for a couple of reasons. Firstly, Mr. Abdayem has spent a considerable amount of money on Humble stock. This suggests that he is very confident the stock is set to move higher. It’s worth noting that Mr. Abdayem does not buy stock very often. Our records show that these recent purchases from the insider are his first in several years.
Secondly, Mr. Abdayem is a top-level insider. Not only is he the founder of The Humble Co AB, which is part of the group, but he is also the Humble Group’s largest shareholder. This means that he is likely to have a superior level of information on the company.
In late May, Humble posted a strong set of first-quarter results. For the quarter, net sales amounted to SEK 88.4 million, an increase of 4,201% on the corresponding period last year. Meanwhile, adjusted EBITDA came in at SEK 6.8 million, an improvement of SEK 8.2 million on the figure posted in Q1 2020. Cash flow for the period amounted to SEK 68.4 million, up from SEK -263,000 in Q1 2020.
Looking ahead, management was optimistic about the group’s prospects. Management believes the combination of the FMCG industry's stable cash flows, the focus on sustainability, and technology development will create attractive opportunities and enable the group to add shareholder value.
“Although 2020 was an exciting year where we went from being a small company to becoming an established player, I dare say that in 2021 we will start to take the really big steps and make a real difference in the industry,” commented CEO Simon Petren.
In light of these results and the outlook, we see the insider buying here as a bullish indicator.