One of the most bullish signals in insider transaction analysis is what’s known as ‘cluster buying.’ This is where three or more insiders at the same company have purchased stock within a short period of time.
In this report, we are going to highlight some recent cluster buying at Prudential PLC (PRU:LN). Prudential is an international financial services company that offers a range of retail financial products and services. After demerging its European and American operations in recent years, it is now purely focused on Asia and Africa. It is listed on the London Stock Exchange and the Hong Kong Stock Exchange and currently has a market capitalization of £30.8 billion.
Prudential PLC: Insider Buying
Our data shows that between March 15 and March 16, three insiders at Prudential bought stocks. Those that picked up shares were:
- Group Risk and Compliance Officer James Turner (10,000 shares @ HKD 108.67 per share)
- Board member Amy Yip (7,291 shares @ £9.88 per share)
- Board member Jeanette Wong (9,600 shares @ HKD 106.62 per share)
Financial Services Experience
All three of these insiders have considerable experience in the financial services sector.
Ms. Wong previously led DBS Group’s institutional banking business, where she was responsible for corporate banking, global transaction services, strategic advisory, and mergers and acquisitions. Prior to this, she was the firm’s Chief Financial Officer.
Ms. Yip was previously CEO of DBS Bank (Hong Kong) Limited, where she was concurrently Head of its wealth management group and previously chair of DBS asset management.
Meanwhile, Mr. Turner joined Prudential over a decade ago as the Director of Group-wide Internal Audit and was appointed Director of Group Finance in September 2015. He joined the Board as the Group Chief Risk Officer in March 2018 and in July 2019 assumed responsibility for Group Compliance.
Given their backgrounds, these insiders are likely to have an excellent understanding of Prudential’s operations and prospects.
Solid 2021 Results
Prudential recently posted a solid set of results for 2021.
For the year, APE sales were up 8% to $4,194 million while new business profit was up by 13% to $2,526 million. Adjusted operating profit from continuing operations amounted to $3,233 million, up 16% year on year.
On the back of these results, the group increased its full-year dividend by 7% to 17.23 cents per share.
Looking ahead, the company noted that there is uncertainty related to the timing of the opening of the Hong Kong border, Covid-19, and the Russia-Ukraine conflict. However, it said that it was confident that its investment in new business, distribution and product enhancements will continue to generate value for shareholders over the long term.
In light of these results, we see the cluster buying here as a bullish indicator.