Corporate executives and directors tend to have superior information in relation to their firms’ operating activities. If these insiders are buying company stock, it’s generally a bullish signal.
Here, we are going to highlight some director purchases at Pandora A/S (PNDORA:DC). Pandora is a jewelry manufacturer and retailer, based in Denmark. The company’s products are marketed in over 100 countries through more than 6,700 points of sale. It’s listed on the Nasdaq Copenhagen Stock Exchange and currently has a market capitalization of DKK 69.47 billion.
Pandora A/S: Insider Buying
Our insider transaction data shows that on February 9, two insiders at Pandora A/S bought stock. Those who bought shares were:
- Director Birgitta Goransson (975 shares @ DKK 727.80)
- Independent Director Jan Zijderveld (550 shares @ DKK 727.20)
In total, the two insiders spent around DKK 1.1 million (approx. USD $170,000) on Pandora A/S stock.
Significant Investment Experience
This insider transaction activity stands out for two main reasons.
Firstly, Birgitta Goransson is Chair of Industrifonden, one of the largest venture capital firms in the Nordic region. She has been a member of the Board at Pandora for six years. This means she is likely to know the company well, and her investment background means she is well placed to make good trading decisions when valuing Pandora’s stock. Meanwhile, Mr. Zijderveld spent 30 years at Unilever and has a wealth of experience in the consumer markets internationally. This should mean he is able to make well informed decisions when predicting Pandora’s prospects.
Secondly, our insider transaction data shows that both directors have upped their stakes significantly. Birgitta Goransson has upped her stake by 75% and Mr. Zijderveld has increased his holding by about 50%. This would suggest that both board members are confident that the share price will move higher.
Pandora continued to perform strongly in Q4, and as a result, it posted organic growth of 23% for the full year. This was ahead of earlier guidance provided by the company.
The online business continued its impressive performance as it posted growth of 91% in the quarter versus Q4 2019. The EBIT margin for the business of 25% was ahead of the company’s expectations.
Pandora disclosed that recent trading has remained solid, and that organic growth was 23% in January 2022, noting that January 2021 was affected by Covid-19. It was encouraging that Pandora announced a new share buyback program of DKK 3.3 billion.
“Our investments in digital are clearly paying off, Moments is showing solid growth, and we are encouraged by the new product platforms Pandora ME and Brilliance. With this – and with network expansion accelerating in 2022 – I am confident that we have all the ingredients to deliver sustainable and profitable revenue growth in the years to come,” said Alexander Lacik, President and CEO of Pandora.
Having read through these impressive Q4 results, we see the recent insider buying at the company as bullish. The outlook statement appears to exude confidence from Pandora’s CEO. In upping their stakes by a significant amount, the two directors appear to be signaling that they believe Pandora’s stock is undervalued by the market.