Insider trades can give investors a more complete view of activity within the world’s publicly-listed companies. No one knows more about a company, and its prospects, than its leaders.
In this report, we are going to highlight a large insider purchase at Publicis Groupe SA (PUB:FP). Publicis is a French communications company that provides a full range of advertising and communications services. Founded in 1926, it is now the third-largest communications group in the world. The company is listed on Euronext Paris and currently has a market capitalization of €13.1 billion.
Publicis: Insider Buying
Our records show that on 31 March, Bryan Kennedy, CEO of Publicis subsidiary Epsilon, bought 24,406 shares at a price of €53.16 per share. This purchase cost the insider approximately €1.3 million.
This trade looks interesting because insider purchases at Publicis are not very common. Our data shows that the last purchase from an insider was back in Q2 2019.
Additionally, Kennedy has significant company and industry experience. The insider – who has been CEO since 2009 – joined Epsilon in 1996 and has been a key architect behind the company’s rapid growth and expansion into the data and digital marketing services arena. In 2017, Kennedy was named one of the 4A’s ‘100 People Who Make Advertising Great’ for his contributions to Epsilon and the advertising industry as a whole. This experience means that he is likely to have a good read on the industry and his company’s growth prospects.
A Return to Growth in Q2
Publicis beat market expectations for organic growth in the fourth quarter of 2020 thanks to the performance of its data company Epsilon, which generated Q4 growth of 5.5% in the US – the group’s largest market. As a result of this performance from Epsilon, group underlying sales for the quarter were only down 3.9%, significantly ahead of the consensus analyst estimate of -6.7%.
Overall, performance in 2020 was solid, with revenue only falling 1.9%. Encouragingly, the group gained market share during the year by growing its top 200 clients by 1.8%. New client wins included Kraft-Heinz, Reckitt Benckiser, Pfizer, Visa, L’Oréal in China, TikTok, and Sephora.
Looking ahead, Publicis did not provide guidance for 2021 due to Covid-19. However, it advised that growth should return in Q2 supported by a favorable base. It also said that it is confident that it will emerge from the crisis as a stronger company.
In light of this outlook, we see the insider purchase here as a bullish signal.