Legal & General Group PLC (LGEN:LN)
12-month performance: -16%
Insider activity: Bullish
Insider buying pattern: Large purchase from the Chairman and a Director
Recent news: Solid half-year results
Company insiders tend to have access to the most up-to-date information on their companies’ future prospects. If they’re buying shares it’s generally a positive development.
In this note, we are going to highlight stock purchases by the Chairman and an Independent Director at Legal & General Group PLC (LGEN:LN). Legal & General is a United Kingdom based financial services company that offers insurance and financial products worldwide. It’s listed on the London Stock Exchange and currently has a market capitalization of £11.8 billion.
Legal & General Group: director dealings
Regulatory filings show that on 25 September the Chairman of Legal & General Group, John Kingman, purchased 41,974 LGEN shares at a price of £1.79 per share. This purchase boosted his holding by just under 20%. Filings also show that an Independent Director, Philip Broadley, purchased 41,575 LGEN shares at the same price. This almost doubled his holding.
Source: 2iQ Research
Multiple insider transactions
The Chairman and Independent Director share purchases look interesting on a couple of fronts. Firstly, both insiders have made a significant increase in their holdings which gives weight to the significance of their investment.
Secondly, the purchase of stock by two insiders simultaneously gives a stronger buy signal than an insider buying stock by themselves. Our Insider Model views these insider purchases as positive.
ResilienceLegal & General Group shares are currently down about 20% year to date, even after a recent rally in the share price.
Half-year results at the start of August, however, suggested that the company had performed resiliently, outperforming many peers. Further resilience was expected in the second-half and in a market that is uncertain, such commentary was reassuring. The balance sheet remains strong and the dividend continues to look secure. Further momentum in the share price looks very plausible.
Considering this reassuring outlook, we see the insider buying here as a bullish signal. It suggests that the Chairman and Independent Director view the stock as undervalued currently.