Top-level corporate insiders have deep insight into their companies’ operations and future prospects. This means that their buying and selling activity can provide investors with valuable trading signals.
In this report, we are going to highlight some interesting insider buying at Mayr-Melnhof Karton AG (MMK:AV). Mayr-Melnhof Karton is a leading manufacturer of packaging. The group is the largest producer of carton board and folding cartons in Europe. It is listed on the Vienna Stock Exchange and currently has a market capitalization of €3.4 billion.
Mayr-Melnhof Karton: insider buying
Our records show that between 11 December and 15 December, MMK’s Chairman of the Supervisory Board Rainer Zellner purchased stock three times. In total, the insider purchased 4,361 shares, spending around €700,000 on stock.
This insider activity is significant for two reasons. Firstly, Zellner has more than doubled his holding. Previously, the insider held 4,000 shares. Now, he owns 8,361 shares. This suggests he is very confident the stock is set to rise.
Secondly, Zellner has a good track record when it comes to timing his purchases. His last purchase was on 19 March at a price of €97.63 per share. Since then, the stock has risen about 70%.
Mayr-Melnhof Karton posted a solid set of third-quarter results recently. For the nine months to the end of September, sales were down just 1.1% on the same period in 2019. Meanwhile, EBITDA was up 3.3% and cash flow from operations increased 0.5%.
Looking ahead, the group said that the impact of the Covid-19 pandemic remains difficult to assess. However, it also advised that due to its focus on system-relevant packaging products for consumer staples a certain resilience should continue to prevail and that with the order backlog at normal levels it has short-term visibility.
In light of these results, we see the insider buying here as bullish. It suggests that the Chairman expects the stock to benefit from the economic recovery in 2021 and the continued growth of e-commerce.