Corporate executives and directors tend to have superior information in relation to their firms’ operating activities. If these insiders are buying company stock, it’s generally a bullish signal.
In this report, we are going to highlight an interesting insider purchase at Keywords Studios PLC (KWS:LN). Keywords Studios provides technical services to the video gaming industry. Its services include art services, game development, audio services, localization, and more. The company is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and currently has a market capitalization of £2.2 billion.
Keywords Studios PLC: Insider Buying
Our data shows that on December 22, board member Neil Thompson bought 2,496 shares at a price of £28.04 per share. This trade cost the insider approximately £70,000 and increased his holding to 3,387 shares.
This insider purchase is worth highlighting due to the fact that Mr. Thompson has significant experience in the video gaming space. Previously, he held a number of senior positions within Microsoft Corporation and was part of the management team that launched Xbox into Europe. He also ran Microsoft’s Consumer and Devices business across EMEA. This means he is likely to have a good understanding of Keywords Studios’ prospects.
It’s worth noting that Mr. Thompson has boosted his holding by 280% with this trade. This suggests that he is very confident the stock is set to move higher.
In late December, Keywords Studios posted an encouraging trading update in which it advised that full-year 2021 performance is expected to be ahead of market expectations.
The group said that it had continued to perform well in the second half of the year with demand for its services driven by the buoyant video games market and the industry's focus on new content creation, and that it now expects that full-year revenue for 2021 of at least €505 million (+35% year-on-year growth).
Looking ahead, Keywords advised that it expects the trading momentum to continue into 2022 and said that it was confident it would deliver 2022 revenue at the upper end of current analysts' consensus forecasts.
"Keywords continues to perform strongly, driven by high levels of demand for our services, as we grow our capabilities, reach and scale,” said CEO Bertrand Bodson in the update.
In light of this trading update, we see the insider buying here as a bullish indicator.