Top-level corporate insiders have deeper insight into their companies’ operations than any outside analyst could ever hope to obtain. This means their buying and selling activity can provide valuable clues in relation to a stock’s potential.
Here, we are going to highlight some bullish insider buying at La Doria Spa (LD:IM). La Doria is an Italian company that is engaged in the production of food products. The group is the number one producer of preserved vegetables, chopped tomatoes, and private label pasta sauces in Italy, and the number two producer of fruit juices. The company is listed on the Borsa Italiana and currently has a market capitalization of €423 million.
La Doria Spa: Insider Buying
Our records show that in late January, two top level insiders at La Doria Spa bought stock. On 26 January, CFO Alberto Festa purchased 3,189 shares at a price of €13.14 per share, spending €42,000 on stock. Then, on 27 January, Chairman and Co-CEO Antonio Ferraioli purchased 5,000 shares at a price of €13.30, spending €66,500 on stock.
Previous Insider Purchases Have Been Timed Well
This insider activity is worth highlighting due to the fact that last year, we observed a number of profitable insider buying signals from the same two insiders at La Doria Spa. In July, for example, we noted that Ferraioli and Festa had purchased about €50,000 and €100,000 worth of stock respectively at around the €10 to €11 level. In the next three months, the stock rose to €13. Meanwhile, in April, we noted that the same insiders had been buying the stock while it was under €10. By early June, the stock was above €11.50. It seems that these two insiders have a good read on the company’s prospects and its share price.
La Doria’s most recent results were very strong and far ahead of expectations. For the first nine months of the year, consolidated revenues were up 19% to €633.4 million, while EBITDA was €56.5 million, up 40.5% year on year. EBITDA margin increased from 7.6% to 8.9%.
Looking ahead, the company said that packaged food product demand may pick up in the fourth quarter – and not return to prior levels as feared – due to households favoring at-home consumption over eating outside, and the increase in remote work. It also said that it expects revenues to rise significantly in 2020, alongside margins, compared to 2019 and against expectations.
Given this strong update, we see the insider buying here as a bullish signal.