Corporate executives and directors tend to have the most up-to-date information on their companies’ prospects. If these insiders are buying company stock, it can be a sign that the stock is undervalued.
In this report, we are going to highlight some bullish insider buying at Jamieson Wellness Inc (JWEL:CN). Jamieson Wellness is a Canadian company that develops, manufactures, and markets vitamins, sports nutrition products, and natural health products. The company is listed on the Toronto Stock Exchange and currently has a market capitalization of CAD $1.4 billion.
Jamieson Wellness: insider buying
Our records show that in November, a number of insiders at Jamieson Wellness purchased stock. In the first half of the month, two directors purchased 3,877 shares while Chairman David Williams bought 10,000 shares. Then, late in the month, the Chairman bought another 10,000 shares while President of Jamieson Canada Michael Pilato purchased 1,070 shares. Combined, these insiders spent around CAD $865,000 on JWEL shares.
This insider activity is significant for a few reasons. Firstly, multiple insiders have purchased stock within a short period of time. This indicates that there is a consensus of opinion that the stock is undervalued at present.
Secondly, the Chairman – who is likely to have a high level of information on the company – has spent around CAD $700,000 on stock. This suggests he is confident that the stock is set to rise.
Share price fall
Jamieson posted a good set of third-quarter results in early November. For the period, revenue was up 19.2% to CAD $105.6 million while adjusted EBITDA was up 18.2% to CAD $22.9 million. Net income was CAD $12.1 million compared to $4.9 million in the third quarter of 2019.
Looking ahead, the company increased its revenue outlook for fiscal 2020 to a range of CAD $395 to $400 million, compared to CAD $385 to $395 million previously, which represents annual growth of 14.5% to 16.0%.
The company’s share price has fallen since the Q3 results were published, however. After rising to CAD $46 early in November, the stock has pulled back to $35. Insiders clearly see this pullback as a buying opportunity. We view this insider activity as bullish.