Insider Buying

Insider Buying Report: IG Group Holdings PLC (IGG:LN)

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IG Group Holdings PLC (IGG:LN)
12-month performance: +31%
Insider activity: Bullish
Insider buying pattern: Purchases from CEO and Chairman
Recent news: Strong full-year results

IG Group is a UK-based financial services company that offers online trading. The company is the world’s number one spread betting and CFD provider based on revenue and is also the UK’s largest forex provider. It is listed on the London Stock Exchange and currently has a market capitalisation of £2.7 billion.

Strong full-year results

IG Group shares have outperformed in 2020 due to increased client activity throughout the Covid-19 pandemic. Year to date, the stock is up 8% versus a -22% fall for the UK’s mid-cap index, the FTSE 250. However, since the company issued its full-year results on 23 July, the stock has pulled back. The full-year results were good, with net trading revenue increasing 36% to £649 million and profit before tax increasing 52% to £295.9 million. However, investors didn't like the fact that trading at IG has moderated since March.

IGG-LN     Source: 2iQ Research

Director dealings: CEO and Chairman purchases

What stands out to us here is the fact that immediately after the company issued its full-year results, both CEO June Felix and Chairman Mike McTighe purchased IGG shares. Felix purchased 6,200 shares at a price of £7.43 per share, while McTighe picked up 3,500 shares at a price of £7.41 per share. These purchases suggest that these insiders – who are likely to have an excellent understanding of the company’s future prospects – are confident about the future and see the stock as undervalued. We see this pattern of insider buying as a bullish signal.