Insider transactions can give investors a more complete view of activity within the world’s publicly-listed companies. No one has more information in relation to a company’s prospects than its leaders.
In this report, we are going to highlight a large insider purchase at IQE PLC (IQE:LN). IQE is a leading global supplier of advanced wafer products and material solutions to the semiconductor industry. Its core business is based around the design and manufacture of compound semiconductor wafers or ‘epiwafers’ using a process called epitaxy. The company is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and currently has a market capitalization of £310 million.
IQE PLC: Insider Buying
Our data shows that on February 15, Founder, board member, and Top 5 insider Dr. Drew Nelson bought 4.127 million IQE shares at a price of £0.36 per share. This trade cost the insider approximately £1.49 million and increased his holding to 40.317 million shares.
Dr Nelson has considerable experience in the semiconductor industry. Following a PhD in Semiconductor Physics, he joined BT Research Laboratories in 1981, leading the group responsible for the development of advanced optoelectronic devices for optical fiber communications. He co-founded EPI in 1988 (which became IQE in 1999) and was appointed CEO of IQE plc in April 1999 before transitioning to a Non-Executive Director with the title of President in September 2021.
What stands out about this trade from Dr Nelson is its size. The fact that the insider – who already owns a lot of stock – has spent another £1.5 million on shares suggests he’s confident the stock is set to move higher.
Revenue In Line with Guidance
After a profit warning in November, IQE advised in a January trading update that revenue for the year ended December 31, 2021 is expected to be in line with its guidance.
For the year, revenue is expected to come in at £164 million, above the current consensus forecast of £152 million. Meanwhile, cash capex spend for FY21 is expected to be in line with previously issued guidance of £14 million to £17 million, resulting in a net debt position at 31 December 2021 of circa £6 million.
“Having joined the business in January I am pleased we have delivered revenues in line with our November 2021 trading update. I have been very impressed by the caliber and commitment of the colleagues I have met during my first weeks with IQE as well as the quality of our world-leading innovation. I am very excited about the potential growth associated with macro technology trends and IQE’s position at the heart of these future products,” commented new CEO Americo Lemos.
Since this update, IQE’s share price has enjoyed a decent rebound. However, the stock remains well below its 52-week highs.
The large buy from Dr Nelson here indicates that he believes there’s further upside on the cards. We see the insider buying as a bullish indicator.