CFO purchases can be extremely informative insider transactions. CFOs have considerable insights into their firms’ financial health, and some studies have found that these insiders earn higher profits following their purchases of company shares than CEOs do.
Here, we are going to highlight a CFO purchase at Kerry Group PLC (KYGA:ID). Kerry Group is a food conglomerate that manufactures its products in 14 countries and sells goods in over 70 countries. It is split into Food Ingredients, Kerry Foods, and Kerry Agribusiness. It is traded on the Dublin and London Stock Exchanges and currently has a market capitalization of €18.58 billion.
Kerry Group PLC: Insider Buying
Our insider transaction data shows that on February 25, the CFO of Kerry Group, Marguerite Larkin, bought 2,835 KYGA shares at a price of €105 per share. This cost the insider around €300,000 (approx. USD $330,000) and increased her holding by about 85%.
Post this, two more insiders have purchased stock on March 14 and 15. Ind. Director, Hugh Brady bought 3,600 shares worth almost €349,000 (approx. USD 383,000). Tom Moran, also an Ind. Director at the company spent roughly €47,000 (approx. USD 51,000) on 490 shares.
This insider purchase caught our eye as we have had Kerry Group on our radar since late last year.
Back in late December, we flagged insider buying at the company by the CEO and Chairman. This latest insider purchase by the CFO shows that positive insider momentum continues to build at the top of the company. Our insider transaction data shows the last four insider trades at Kerry Group have all been buyings.
Additionally, this trade is large in monetary terms, and it also increases the CFO’s holding by a significant amount in percentage terms. This suggests that she is confident that the shares will increase in value going forward.
Strong Finish to the Year
Kerry Group saw good growth levels throughout the business in 2021.
The group’s full-year revenue grew 5.7% to €7.4 billion as the company saw 8% volume growth versus the year prior. The business finished the year strongly with Taste & Nutrition volumes in Q4 up 7.2% when compared with Q4 2020. Consumer Food volumes were up 7.1%. Pricing moved up 1.2% in 2021 from where it was in the previous year. The trading margin was up 40 basis points to 11.9% and the basic EPS figure of 430.6 cents for the full-year was significantly higher than the 313 cents achieved in 2020.
“While recognizing that current market environment and inflationary pressures continue to present challenges across our industry, Kerry is stronger positioned and more resilient than ever as we enter a new strategic cycle. Our earnings guidance range for 2022 reflects the Group's strong growth prospects and the net effect of recent portfolio developments,” said Edward Scanlon, Chief Executive Officer.
These encouraging preliminary results and upbeat remarks on the outlook for the business, suggest to us that the recent insider buying at Kerry Group is bullish. Positive insider momentum appears to be building at the company and in almost doubling her stake, the CFO is creating the impression that she feels the shares are undervalued by the market.