Corporate insiders tend to have the most up-to-date financial data on their companies. If these individuals are buying company stock, it’s often a sign that performance is strong and that the outlook for the stock is favorable.
In this report, we are going to highlight some insider buying at Polar Capital Holdings PLC (POLR:LN). Polar Capital is a boutique UK investment management company that offers a range of specialized funds. Since its foundation in 2001, it has grown steadily and now has 16 autonomous investment teams managing specialist, active and capacity constrained portfolios, with a combined AUM of around £23 billion. It is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and currently has a market capitalization of £774 million.
Polar Capital Holdings: Insider Buying
Our data shows that on October 14, 2021, Non-Executive Director Andrew Ross purchased 15,000 shares at a price of £7.71 per share. This trade cost the insider £115,650 and increased his holding to 40,000 shares.
Investment Management Experience
Mr. Ross is a highly experienced financial services practitioner, having spent over 20 years in senior roles at investment and wealth management firms. Previously, he was CEO of HSBC Asset Management (Europe) Limited and Cazenove Capital Management. Given his background, he is likely to have a good understanding of the stock’s intrinsic value.
What stands out about this trade is that it has increased the size of Mr. Ross’ holding by 60%. The fact that the insider has boosted his stake by such a large amount suggests that he is very confident the stock is set to rise.
12% Increase in AUM
Polar Capital recently posted a good AUM update that showed that the firm is growing at a healthy rate.
As of September 30, 2021, AUM was £23.4 billion, compared to £20.9 billion at the end of March 2021. This 12% increase in AUM was the result of £0.7 billion of net inflows and £1.8 billion in market movements and fund performance.
Looking ahead, the group should benefit from its range of new sustainable investing funds, which were launched in September. These funds, which include a Smart Energy fund and a Smart Mobility fund, will invest in companies at the forefront of the global transition towards a cleaner, more efficient, and sustainable future. They will be managed by Thiemo Lang, who has nearly 15 years of experience in the smart energy space and has built up an impressive track record.
“We remain confident that with our diverse range of differentiated, active specialist fund strategies we are well-positioned to perform for our clients and shareholders over the long term,” said CEO Gavin Rochussen in relation to the new sustainable funds.
Given the solid growth here, we see the insider buying as a bullish development. It suggests that the insider expects the stock to rise from here.