The most profitable insider transactions often occur in small-cap firms. In this segment of the market, there’s more potential for large share price movements.
In this report, we are going to flag some interesting insider buying in a US small-cap stock, Logiq Inc (LGIQ:US). Logiq is a provider of e-commerce, m-commerce, and FinTech business enablement solutions. Its AppLogiq™ platform-as-a-service enables small-and-medium sized businesses to easily create and deploy a native mobile app for their business without technical knowledge or background. The company is listed on the OTC Markets platform and currently has a market capitalization of $195 million.
Logiq Inc: insider buying
Our records show that on 15 December, Logiq’s President and Executive Chairman Brent Suen purchased 10,000 LGIQ shares at a price of $10.37 per share. This purchase – which cost the insider a total of $104,000 – increased the size of his holding by 5%.
High insider IQ
This insider purchase is significant for two reasons. Firstly, Suen – who has significant experience with Telecom, Media and Technology (TMT) companies as both an investor and an advisor – has a good track record when it comes to the timing of his purchases. Our records show that late last year he purchased a substantial amount of stock when the share price was under $1. Since then, it has risen to $13.
Secondly, this is his largest purchase all year and his second-largest purchase ever. This suggests he is very confident the stock can continue to move higher.
Strong growth expected in 2021
Logiq posted an encouraging set of third-quarter results in November. While Q3 revenue was down 22% due to the Covid-19 pandemic, revenue for the nine months ended 30 September increased 27% to $31.3 million. Consolidated gross profit for the first nine months of 2020 increased 14% to $5.0 million or 15.9% of consolidated revenue.
Looking ahead, the company was confident in relation to its future prospects, stating that it remains on track to end 2020 with record revenue at more than $38 million, and with margins expanding across all business segments.
“We have been able to transform Logiq into a global provider of a full range of eCommerce solutions for companies of all sizes. This has put us on course for strong growth in 2021 and beyond with more diversified, high-margin revenue streams derived from the strongest segments of our industry,” commented Mr. Suen.
In light of this confidence about the future, we see the insider buying here as bullish.