Insider Buying

Insider Buying Report: Mondi PLC (MNDI:LN)

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Mondi PLC
(MNDI:LN)
12 months:
+12%
Activity:
Bullish
Pattern:
Purchase from Chairman
News:
Good Q3 results
Mondi PLC
(MNDI:LN)
12 months:
+12%
Activity:
Bullish
Pattern:
Purchase from Chairman
News:
Good Q3 results

Insiders tend to be value investors. If they’re buying company stock, it’s usually because they believe the stock is undervalued.

In this report, we are going to highlight an interesting insider purchase at Mondi PLC (MNDI:LN). Mondi is a UK-based packaging and paper company that has a focus on sustainability. The company is the number one producer of virgin containerboard in Europe, as well as the number one producer of paper bags. It is listed on the London Stock Exchange and currently has a market capitalization of £8.7 billion.

Mondi: Insider Buying

Our records show that on October 20, Mondi’s Chairman Philip Yea bought 5,000 MNDI shares at a price of £17.73 per share. This trade cost the insider £88,650 and increased the size of his holding to 25,000 shares.

The graph depicts the price history of  Mondi PLC, with important purchase and sell events highlighted.

Financial Background

This trade is worth highlighting due to the fact that it has increased the size of Mr. Yea’s holding by 25%. This suggests Yea – who became Chairman in May 2020 – sees a lot of value in the stock right now.

It’s worth noting that Mr. Yea has a finance background. Previously, he was CEO of UK private equity group 3i. Before this, he was a managing director at Investcorp – a leading provider of alternative investment products. Given his background, it’s fair to assume that he knows what he is doing here.

Positive Outlook

Mondi delivered a strong performance in the third-quarter of 2021.

For the period, underlying EBITDA amounted to €388 million, up 27% compared to the prior year period (Q3 2020: €306 million) and up 9% on a sequential basis (Q2 2021: €356 million). This performance was driven by higher average prices across the business as well as strong volume growth year on year.

Looking ahead, management was confident about the future, despite the fact that higher input costs are likely to impact the company in the short term.

“While in the short term the fourth quarter will be impacted by recent input cost increases alongside planned maintenance and project-related shuts, the Group remains well-placed to deliver sustainably into the future, supported by our leading offering of sustainable packaging solutions, integrated cost-advantaged asset base and culture of continuous improvement,” said CEO Andrew King.

“We are excited by the possibilities offered by our high-quality asset base, supported by strong structural growth trends in the markets we serve, including eCommerce and the demand for more sustainable packaging solutions,” he added.

The company noted that demand remains strong and that it is implementing price increases to offset inflationary pressures.

In light of the confident tone from management, we see the insider buying here as a bullish indicator.

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