Top-level corporate executives such as CEOs and CFOs tend to have a deep level of insight into their own companies. If these insiders are buying company stock, it can be worth taking a closer look.
In this report, we are going to highlight some insider buying from top-level executives at Nilfisk Holding A/S (NLFSK:DC). Nilfisk is one of the world’s leading manufacturers of professional cleaning equipment. Its main product lines are floorcare equipment, vacuum cleaners, and high pressure washers. The company is listed on the OMX Nordic Exchange Copenhagen and currently has a market capitalization of DKK 5.0 billion.
Nilfisk: Insider Buying
Our records show that during March, Nilfisk’s CEO and CFO have both bought stock. CEO Hans Henrik Lund has purchased 23,400 shares, spending about DKK 4 million (approx $650,000) on stock, while CFO Prisca Havranek-Kosicek has purchased 5,000 shares, spending about DKK 890,000 (approx $140,000).
Large Insider Trades
This insider transaction activity is significant because it represents the largest amount of insider buying within a quarter at Nilfisk for approximately two years. This suggests that insiders believe that now is an opportune time to buy stock.
Additionally, these purchases have increased both insiders’ holdings significantly. Lund’s purchases have increased the size of his position from 19,600 shares to 43,000 shares – an increase of 120%. Meanwhile, Havranek-Kosicek’s purchases have increased the size of her position from 0 shares to 5,000 shares. This indicates that these insiders are quite confident the stock is set to move higher.
A Return to Growth in 2021
Nilfisk was impacted negatively by the coronavirus pandemic last year. For the year, revenue for the total business amounted to €833 million, down 14% on the previous year. Meanwhile, EBITDA before special items amounted to €100.5 million, down €17.2 million year on year, due to the decrease in revenue.
However, Nilfisk has said that demand improved quarter over quarter in the second half of the year. And looking ahead to 2021, it expects a more normalized environment during the second half of the year on the back of the global vaccine roll out. Currently, it expects to generate organic growth of 5% to 10% compared to 2020, based on the market demands trends it is experiencing and on the overall expected economic recovery.
“In spite of continued uncertainty in the marketplace we are planning for increased market activity and expect to restore growth in 2021,” said CEO Hans Henrik Lund in the company’s full-year results.
In light of this outlook, we see the insider buying here as bullish.