Corporate executives are some of the most informed participants in the market. If these insiders are buying shares in their own company, it’s worth taking a closer look at the stock.
In this report, we are going to flag some bullish insider buying at Jungheinrich AG (JUN3:GR). Jungheinrich is a German company that is engaged in the development, production, and sale of ‘intralogistics’ warehousing technology. The company is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €1.9 billion.
Jungheinrich: Insider Buying
Our records show that this month, two top-level insiders at Jungheinrich have purchased stock. On 15 January, Supervisory board member Wolff Lange purchased 20,000 preferred shares at a price of €37.39 per share. Then, on 18 January, Supervisory board member Andreas Wolf purchased 13,300 preferred shares at a price of €37.67 per share. Combined, these insiders spent around €1.25 million on stock.
High Insider IQ
This insider activity looks interesting for a number of reasons. Firstly, Wolff Lange’s recent purchases have been timed well. Our data shows that the insider made a number of purchases last year when the share price was much lower than it is today.
Secondly, these purchases represent the largest amount of insider buying at Jungheinrich within a quarter since Q4 2019. The fact that insiders are buying now, at higher prices than last year, suggests that they are confident the stock will move higher.
Increased ForecastJungheinrich’s performance was impacted by the coronavirus in the first half of 2020. Revenue for H1, for example, was down 8% on the prior year. Meanwhile, incoming orders were down 12%.
However, in the second half of the year market conditions improved and in October, the group released an ad-hoc announcement in which it raised its forecast for the 2020 financial year. It advised that for the full year, it is expecting incoming orders of between €3.5 billion and €3.7 billion, up from the previous forecast of €3.4 billion to €3.6 billion.
“Customer demand has been gradually picking up. This is why Jungheinrich expects revenue for the rest of 2020 to be higher than initially planned. The Board of Management assumes that the improved efficiency and cost-cutting measures initiated at an early stage and consistently implemented will continue to have a positive impact on earnings,” the company said.
More recently, in November, the company stated it is “getting through the coronavirus crisis better than initially expected” and that it will “emerge strengthened” from the crisis.
In light of these recent developments, we see the insider buying here as a bullish signal.