Insider Buying

Insider Buying Report: Nordic Semiconductor (NOD:NO)

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Nordic Semiconductor (NOD:NO)

12-month performance: +82%
Insider activity: Bullish
Insider buying pattern: Purchase from Chairman
Recent news: Strong Q3 results

Large insider purchases are generally a bullish signal. Insiders sell company stock for a number of reasons. Yet they only buy stock for one reason – they expect it to rise.

Here, we are going to highlight some interesting insider buying at Nordic Semiconductor (NOD:NO). Nordic Semiconductor is a Norwegian technology company that develops wireless communication solutions. It’s listed on the Oslo Stock Exchange and currently has a market capitalization of NOK 19 billion.

Nordic Semiconductor: insider buying

Our records show that on 21 October, Nordic Semiconductor’s Chairman Birger Steen added 5,000 shares to his holding. The insider paid a high price of NOK 113 per share (approximately 13% above the current share price). The total cost of the purchase was NOK 565,000 (approximately USD $61,000).

NOD-NO 2 (chart)     Source: 2iQ Research

High insider IQ

This insider purchase is worth highlighting due to the fact that most of Steen’s last few purchases have been timed very well.

For example, on 9 September 2020, the insider purchased 2,000 shares at a price of NOK 88.99 per share. Since then, the stock has risen as much as 29%. Meanwhile, on 21 April 2020, the insider purchased 4,771 shares at a price of NOK 52.40 per share. In the next three months, the stock rose about 75%. And on 11 July 2019, the insider bought 25,000 shares at a price of NOK 39.20 per share. In the next 12 months, the stock rose approximately 120%.

Our data shows that Steen generally buys stock before significant rises in the share price. Our Insider IQ model gives Steen an above average long-term trading IQ of 104.

Strong Q3 results

Nordic Semiconductor posted a very strong set of Q3 results on 20 October. For the quarter, revenue came in at USD $119.4 million, an increase of 45% on the same period last year. Meanwhile, EBIT was USD $20.8 million versus USD $5.7 million last year. The order backlog was USD $288.4 million at the end of Q3, which was an all-time high, and more than double the USD $113.6 million figure at the end of Q3 2019.

For the full year, the company said that it is expecting revenue growth of 36% to 40%. It said that the revenue growth reflects accelerated technology adoption and broad-based demand increases across all end-user markets.

In light of this strong growth, we see the insider buying here as a bullish signal. The purchase from the Chairman suggests that he expects the stock to keep rising.