Insider transactions can provide investors with valuable insights. Corporate insiders tend to have the most up-to-date information on their companies and they are generally way ahead of analysts when it comes to business trends.
In this report, we are going to highlight some bullish insider buying at Novo Nordisk A/S (NOVOB:DC). Novo Nordisk is a Danish healthcare company that is focused on diabetes, obesity, and rare blood and endocrine diseases. Globally, it produces around 50% of the world’s insulin supply. The company is listed on the OMX Nordic Exchange Copenhagen and currently has a market capitalization of DKK 1,068 billion.
Novo Nordisk: Insider Buying
Our records show that on 12 February, Vice Chairman Jeppe Christiansen purchased 11,000 NOVOB shares at a price of DKK 454.20 per share. This purchase – which increased the size of his holding by 46% – cost the insider approximately DKK 5 million (USD $814,200).
Investment Management Background
This insider activity is significant for a number of reasons. Firstly, it’s a large purchase both in nominal and relative terms. Our data shows that it is the largest insider purchase at Novo Nordisk for several years.
Secondly, Mr Christiansen has significant company experience. He was first elected to the board and as vice Chairman in March 2013 and has most recently been re-elected in March 2020.
Third, Mr Christiansen has a background in finance and investment management. From 2005 to 2009 he was CEO of LD Pensions. Prior to that he was executive director at Danske Bank from 1999 to 2004 with responsibility for group equity business and corporate international banking. Given this investment management experience, he is likely to have a good understanding of the stock’s true value.
Dividend Increase and Share Buyback
Novo Nordisk recently posted a solid set of full-year results.
For the year, sales increased by 7% at constant rates to DKK 126.9 billion. Meanwhile, operating profit and diluted earnings per share were up 3% and 10% respectively. The company advised that it would be increasing its full-year dividend to DKK 9.10 per share from DKK 8.35 per share and also initiating a new 12-month share repurchase programme of up to DKK 17 billion.
Looking ahead, Novo Nordisk said that it expects sales growth of between 5% to 9% at constant rates for 2021, and operating profit growth of between 4% to 8% at constant rates.
Given these solid results, and the healthy forecasts for the year ahead, we see the insider buying here as bullish.