CFO purchases can be extremely informative insider transactions. CFOs have considerable insights into their firms’ financial activities, and some studies have found that these insiders earn higher profits following their purchases of company shares than CEOs.
In this report, we are going to highlight some CFO trading activity 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 the third-largest communications group in the world today by revenue. The company is listed on Euronext Paris stock exchange and currently has a market capitalization of €14.6 billion.
Publicis Groupe: Insider Buying
Our insider transaction data shows that on April 19, CFO Michel-Alain Proch bought 5,000 shares at a price of €55.22 per share. This trade cost the insider €276,100 and increased his holding to 30,000 shares.
Bullish Trading Activity
This trade is worth highlighting due to the fact that it represents the second large purchase from the CFO in the space of two months. Looking at our data, we can see that Mr. Proch also picked up 4,297 shares on March 2 at a price of €56.09 per share. This means that the insider has added a total of 9,297 shares since early March, and in the process, increased the size of his holding by 45%. The fact that the insider has boosted his stake by such a large percentage suggests he is confident that the stock is set to move higher.
Publicis recently posted a strong set of results for the first quarter of 2022.
For the period, net revenue came in at €2.8 billion, which represented total growth of 17.1% year on year. Meanwhile, organic growth for the period was 10.5% – well above expectations. Europe and Asia Pacific were the strongest regions for the period, generating organic growth of 14.9% and 14.4% respectively. During the period, the group won new business from many major corporations including the likes of Siemens, KFC, LVMH, and Pepsi.
Looking ahead, Publicis noted that macro issues are creating uncertainty. However, it said that it expects to have a very solid Q2, with organic growth of around 5%. And for the year, it expects organic growth at the upper end of the 4-5% mark.
“We started the year very strongly, both financially and commercially,” commented Chairman and CEO Arthur Sadoun. “We are confident in our ability to deliver on all of the objectives we set for the year and actually come in at the upper end of our organic growth target, despite the uncertainty caused by the global health situation, the evolution of the conflict in Ukraine, and the consequences of inflation for our clients,” he added.
In light of the confidence from management, we see the insider buying here as a bullish indicator.