Insider buying can provide clues about a stock’s next move. Insiders sell company stock for a wide range of reasons. But they only buy stock for one reason – they expect it to go up.
In this report, we are going to highlight some interesting 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. Its products include automated guided vehicles, forklifts, storage systems, batteries, and digital tools. The company is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €1.9 billion.
Jungheinrich: Insider Buying
Our data shows that since mid-August, a number of insiders at Jungheinrich have bought stock.
The insider that has purchased the most shares during this period is Supervisory Board member Wolff Lange, who has acquired 230,000 shares at prices of between €43.14 and €45.12 per share. In total, Lange has spent around €10 million on Jungheinrich stock.
Other insiders that have purchased stock over this period include:
- CFO Volker Hues (2,500 shares)
- Supervisory Board member Andreas Wolf (5,000 shares)
- Chairman of the Supervisory Board Hans Georg-Frey (1,000 shares)
Bullish Trading Activity
This insider activity is worth highlighting for a number of reasons.
Firstly, multiple top-level insiders have purchased company stock. This tells us that there is a consensus of opinion within the boardroom that the stock is set to move higher.
Second, the insiders have spent a substantial amount of money on shares. Combined, they have spent around €11 million on JUN3 stock. This suggests they are very confident in their investment theses.
Third, several of these insiders have made well-timed trades in the recent past. For example, in January of this year, both Andreas Wolf and Wolff Lange bought stock near the €37 mark. After these buys, the stock rose around 30% in the next three-and-a-half months.
Strong First Half
Jungheinrich had a good first half of the year.
For the period, incoming orders hit €2.42 billion (previous year: €1.81 billion) while revenue amounted to €1.99 billion (previous year: €1.80 billion). The main driver of the increase in revenue was the new truck business which experienced higher production volumes of forklift trucks and solid growth in automated systems. Net profit came in at €121 million versus €60 million a year earlier.
Looking ahead, the group confirmed its guidance for 2021, which was raised in April on the back of very strong incoming orders and anticipated high demand for material handling equipment and automated systems for the rest of the year.
“The first half year of 2021 was very good for Jungheinrich. This is particularly evident in the strong number of incoming orders. We were also able to significantly increase our profitability. Thanks to our effective supply chain management, we were able to minimise the consequences of the tense global supply chain situation on the Group. We are positive about the remainder of the year,” commented Chairman of the Board of Management Dr Lars Brzoska.
In light of these results and the outlook, we see the insider buying here as a bullish indicator. It suggests that insiders are confident about the future and expect the stock to rise from here.