Corporate executives and directors tend to have a good understanding of their companies’ future prospects. If these insiders are buying company stock, it’s generally a sign that the outlook for the stock is favorable.
Here, we are going to highlight some interesting insider buying at Ocado Group PLC (OCDO:LN). Ocado is a UK company that offers online grocery services and warehouse automation solutions. It is listed on the London Stock Exchange and currently has a market capitalization of £19.6 billion.
Ocado: Insider Buying
This month, we have observed two significant insider transactions at Ocado. The first was a purchase from Chairman-elect Rick Haythornthwaite on 10 February. This purchase was for 3,725 shares at a price of £26.79 per share. The second was a purchase from board member John Martin on 12 February. This purchase was for 3,859 shares at a price of £25.91 per share.
This insider buying activity is worth highlighting for two reasons. Firstly, our data shows that these purchases represent the largest amount of insider buying at Ocado within a quarter for several years.
Secondly, both insiders are highly-skilled businessmen. Previously, Haythornthwaite held the role of chairman of Mastercard Inc. from 2006 until the end of 2020. He is also currently the chairman and co-founder of QiO Technologies Ltd, an advanced analytics and AI software company.
Martin, meanwhile, has extensive operational and financial management experience running large international businesses. Previously, he was CEO of Ferguson plc, the world's leading specialist distributor of plumbing and heating products. He was also a partner at Alchemy Partners, a private equity group.
Strong Full-Year Results
Ocado recently posted an impressive set of full-year results.
For the year ended 29 November 2020, retail revenue was up 35.3% while total group revenue was up 32.7%. Meanwhile, retail EBITDA was up 266% while total group EBITDA was up 69%. The group’s financial position at the end of the year was strong, with cash and other financial assets of £2.1 billion on the balance sheet.
Looking ahead, the company appears to be well placed for growth.
“As we look ahead to a post-vaccine world and a return to a new normality, Ocado Group is very well placed to enable our grocery partners worldwide to bring the best customer experience to market, responsibly, with high levels of hygiene and superior, sustainable, and proven economics. We believe strongly that our platform will help our partners deliver a market-leading service to their customers, as the very promising initial results from our partners Groupe Casino and Sobeys have shown,” said CEO Tim Steiner.
In light of these strong results, and the confident tone from management, we see the insider buying here as a bullish signal.