If multiple insiders are buying company stock, it’s often worth taking a closer look. This buying pattern – which is called ‘cluster buying’ – is a particularly strong insider trading signal.
In this report, we are going to highlight some cluster buying at LINK Mobility Group Holding (LINK:NO). Link Mobility is a Norwegian software company that specializes in messaging and digital services and offers a communication platform as a service (CPaaS). It’s listed on the Oslo Stock Exchange and currently has a market capitalization of NOK 11.2 billion.
LINK Mobility: Insider Buying
Our records show that in late March, three insiders at LINK Mobility purchased stock in a cluster buying pattern. Those who bought stock were:
- Chairman Jens Rugseth (500,000 shares)
- CEO Guillaume Van Gaver (25,000 shares)
- EVP M&A and Business Development Soeren Sundahl (150,000 shares)
Combined, these insiders spent around $3.5 million on stock in the space of just a few days.
This cluster buy is worth highlighting for a couple of reasons. Firstly, these are all top-level insiders that have purchased stock. All three are likely to have an in-depth understanding of the company, its performance, and its future prospects.
Secondly, these insiders have spent a substantial amount of money on stock. This suggests that they are very confident that the stock will move higher. It’s worth noting that all three insiders increased the size of their holdings by more than 10% with these purchases.
Strong Q4 Performance
LINK Mobility delivered a good set of fourth-quarter results in February. For the quarter, total operating revenue came in at NOK 1.04 billion, up from NOK 879 million in the same quarter a year earlier. Total organic growth was 16% with organic growth of 18% in the enterprise segment. Adjusted EBITDA came in at an all-time high of NOK 119 million with a margin of 11%.
For the full-year 2020, the company exceeded its guidance. Comparable reported revenue was NOK 3.6 billion while adjusted EBITDA was NOK 384 million – above its previous guidance of NOK 360 - 370 million. As a result of this performance, the company said that it is now targeting NOK 10 billion in pro forma revenue by 2024.
Despite this good performance, LINK Mobility shares have fallen recently, dragged down by the sell-off in the tech sector. This insider buying suggests that those within the company expect the stock to bounce back. We see this buying activity as bullish.