Insider buying can provide investors with crucial insights. Insiders sell company stock for a variety of reasons. They only buy stock for one reason however – they expect the price to rise.
Here, we are going to highlight an insider stock purchase at Jupiter Fund Management PLC (JUP:LN). Jupiter Fund Management is a UK-based company that manages investment funds for both private and institutional investors. Its funds allow investors to gain exposure to the equity and fixed income markets in the UK, Europe, Asia and other Global markets. The company recently acquired Merian Global Investors Limited to expand its offering and increase its global reach. It’s traded on the London Stock Exchange and currently has a market capitalization of £1.488 billion.
Jupiter Fund Management PLC: insider buying
Regulatory filings show that on 26 June, an Independent Director at Jupiter Fund Management, Roger Yates, purchased 200,000 JUP shares at a price of £2.66 per share. This purchase cost the insider just over £500,000 and increased his holding by 900%.
This trade stands out due to its size. Our data shows us that this is the largest insider purchase at Jupiter Fund Management since last August. Yates has been at the company for nearly four years and this is his first significant investment in Jupiter’s stock. It suggests he is very optimistic on the future prospects of the company.
It's worth noting that Yates has 30 years of experience in the industry and has spent much of that time in senior roles. As well as being Chief Investment Officer at Invesco he has also been CEO at Henderson Group PLC between 1999 and 2009. Other Boardroom level roles have followed such as the position of Non-Executive Director at IG Group Ltd. His CV suggests he is very capable at making informed investment decisions.
A New Period of Growth
Jupiter Management Group’s latest trading update suggested that there had been a period of stability during Q1. AUM at the end of the period stood at £58.8 billion which was an increase of £0.1 billion from the end of December 2020. There were net outflows of £0.8 billion in the period driven by lower client demand for UK and European focused Equity strategies which was an improvement on the circa £1 billion of net outflows in Q4 2020. Encouragingly, there were positive inflows into Dynamic and Strategic Bond and Gold & Silver Strategy as well as the Global Equity Absolute Return Fund.
This update follows on from some reassuring final results for 2020 when the group ended the year with a record high AUM of £58.7 billion and successfully integrated Merian Global Investors into the business. The company stated its objective to grow inflows in the 2020 final results.
“Now, with so many fantastic new investment capabilities and products, in 2021 we are in a position to pivot from the internal activities that have been so vital to rebuilding the business, and now focus our energies on the growth areas that will deliver consistent net inflows and generate the revenues and profits from which we can invest and share with our shareholders,” said Andrew Formica, CEO of Jupiter Fund Management.
Given that this latest trading update indicated a period of stability at the company, we see the recent insider buying at Jupiter Fund Management as bullish. It would suggest that the insider is positive on its future prospects and sees the shares as undervalued as a consequence.