Top-level corporate insiders tend to have a detailed understanding of their companies’ operations. If these individuals are buying company stock, it’s often a sign that business performance is strong and that the outlook for the stock is attractive.
In this report, we are going to highlight some buying from top-level insiders at Mayr-Melnhof Karton AG (MMK:AV). Mayr-Melnhof Karton manufactures packaging for the consumer goods industry. The group is the largest producer of cartonboard and folding cartons in Europe and also the largest exporter of cartonboard from Europe. It is listed on the Vienna Stock Exchange and currently has a market capitalization of €3.33 billion.
Mayr-Melnhof Karton: Insider Buying
Our data shows that several insiders at Mayr-Melnhof Karton have purchased stock recently.
In late August and early September, Chairman of the Management Board and CEO Peter Oswald made two purchases, picking up a total of 1,000 shares at an average price of €178.59 per share.
Then, in mid-September, Chairman of the Supervisory Board Rainer Zellner made two purchases, picking up 5,000 shares at an average price of €173.50 per share.
More recently, on 30 September, Deputy Chairman of the Supervisory Board Nikolaus Ankershofen added 300 shares at a price of €165 per share.
What stands out about this insider activity is that two top-level insiders have increased the size of their positions significantly.
Our data shows that Mr. Oswald’s trades – which cost a total of €178,590 – increased the size of this holding from 1,000 shares to 2,000 shares – an increase of 100%.
Meanwhile, it shows that Mr. Zellner’s trades – which cost a total of €867,500 – increased the size of his holding from 8,361 shares to 13,361 shares – an increase of 60%.
The fact that these two insiders have boosted the size of their holdings significantly suggests that they are very confident the stock is set to rise.
Hit By Inflation
Mayr-Melnhof Karton’s recent H1 results showed that, like many other companies, it is suffering from cost inflation at present. While the group saw “good demand” for cartonboard and cartonboard packaging over the period and sales were up 1.8% year on year, profit for the period was down 27%. The group advised that a time lag between cost inflation for raw materials, energy, and logistics, and implemented price increases led to a “major squeeze” on operating profit in the cartonboard business.
There were some positives in the results, however. For a start, the group said that its order backlog in its MM Board & Paper division was 194,000 tons on 30 June, versus 115,000 tons a year earlier. Secondly, it advised that it plans to compensate for the significant cost increases by increasing cartonboard prices again in October. Additionally, MMK said that the “transformational acquisitions” of the Kwidzyn mill in Poland and Kotkamills in Finland have structurally strengthened the group's competitiveness.
Putting this all together, we see the insider buying here as a bullish indicator. It suggests that insiders here believe the outlook for the company is set to improve.