One of the most bullish insider transaction patterns is ‘cluster buying.’ This is where three or more insiders have purchased company stock within a short period of time.
In this report, we are going to highlight some recent cluster buying at Munich Re Co (MUV2:GR). Munich Re is a leading provider of reinsurance, primary insurance, and insurance-related risk solutions. The company is globally active and operates in all lines of the insurance business. It is listed on Deutsche Börse’s Xetra and currently has a market capitalization of $36.34 billion.
Munich Re: Insider Buying
Our data shows that on February 23, four insiders at Munich Re purchased stock at prices of between $276.15 and $276.77 per share. Those who bought shares were:
- CFO Christoph Jurecka (489 shares)
- Management board member Torsten Jeworrek (1,900 shares)
- Management board member Achim Kassow (200 shares)
- Management board member Stefan Golling (1,200 shares)
Combined, these four insiders spent around $1.1 million on stock.
Following in after these trades on March 07, Board Member Nicholas Gartside also purchased 500 shares at a price of $234.4.
There are a couple of things that stand out about this cluster of purchases.
One is that all of the individuals that have bought stock are members of the management board. This means they are likely to have deep insight into the company’s operations.
Another is that Mr. Golling and Mr. Jeworrek have increased the size of their positions by around 40% and 70% respectively. This suggests they are very confident the stock is set to move higher.
Large Dividend Increase
Munich Re recently posted a solid set of full-year 2021 results in which net profit more than doubled year on year.
For the year, net profit amounted to €2.93 billion, up 142% year on year, and above the group’s profit target of €2.8 billion. Meanwhile, earnings per share rose by 4.7%, with return on equity amounting to 12.6%.
On the back of these results, the group lifted its full-year dividend by 12% to €11 per share. It also announced a €1 billion buyback.
Looking ahead, the group was confident that it is on track to deliver growth and meet its goals. For 2022, it expects to generate a record €61 billion in group premium income, and achieve a net profit of €3.3 billion.
“The year 2021 was good for Munich Re. We beat our profit target, while also making our balance sheet even stronger despite high inflation. Both an increased dividend and a new share buy-back will enable our shareholders to share in this success. Our Ambition 2025 strategy programme got off to a very good start and is picking up speed. Propelled by this momentum, we will resolutely tap into the favorable market environment as we increase our profit to €3.3 billion in 2022,” said Chair Joachim Wenning.
In light of these solid results, and the large dividend increase, we see the insider buying here as a bullish indicator.