It is the top-level company insiders such as CEOs and CFOs who tend to have the most up-to-date information on their companies. If they are buying company stock, it is generally a positive signal for investors.
Here, we are going to highlight multiple insider transactions at Nordic Entertainment Group (NENTB:SS). Nordic Entertainment Group is a Swedish entertainment company that provides broadcast television and streaming services throughout Scandinavia. The group operates satellite TV platforms, TV channels, and video streaming services and also creates and distributes TV shows, commercials, feature films, and branded content. The company is listed on the Stockholm Stock Exchange and currently has a market capitalization of SEK 29.5 billion.
Nordic Entertainment Group: insider buying
Regulatory filings show that on 11 November the President/CEO of Nordic Entertainment Group, Anders Jensen, purchased 2,900 NENTB shares at a price of SEK 355 per share. This purchase cost the insider approximately SEK 1 million. Chief Level Officer, Filippa Wallestam, purchased 1,025 shares at a price of SEK 353 per share on 12 November. Gabriel Catrina, the CFO, also bought 1,000 shares at a price of SEK 394 per share, on 18 November.
This cluster buying pattern looks interesting, in our view. The fact that three top-level insiders have purchased stock in quick succession tells us that there is a consensus of opinion that the stock is undervalued present. It’s worth pointing out that a similar cluster of buying happened back in February/March at prices significantly below current levels, which suggests that these insiders are good at timing their share purchases.
Organic sales growth
Operating income at Nordic Entertainment Group has been significantly impacted by Covid-19, with advertising and the studio businesses being hardest hit. Organic sales grew by 9.1% in Q3, however, which was a significant improvement, given Q2 saw a double-digit decline.
Restructuring means that Nordic Entertainment Group will be a much leaner business going forward, leading to significant cost savings and the ability to focus on the fast-growing subscriber businesses. We see the insider buying here as bullish, given the recent update. It suggests that key insiders believe there are further increases in the share price to come.