Top-level corporate executives such as CEOs, CFOs, and Chairmen tend to have the most up-to-date information on their companies. If they are buying stock it is usually a positive news event.
Here, we are going to highlight top-level insider purchases at Sanne Group PLC (SNN:LN). Sanne Group provides alternative asset and corporate administration services worldwide. It’s traded on the London Stock Exchange and currently has a market capitalization of £806 million.
Sanne Group PLC: Insider Buying
Regulatory filings show that on 28 January, the CFO of Sanne Group, James Ireland, purchased 5,300 SNN shares at a price of £5.65 per share. On the same day, the Chairman, Rupert Robson, purchased 21,057 SNN shares at a price of £5.70 a share. This purchase cost the insider approximately £120,000 and increased his holding by 37%.
This director dealing stands out for several reasons. Firstly, our data shows that this is the first time that multiple insiders have bought together since March 2019.
Secondly Robson’s purchase has increased his holding significantly, which suggests he is confident in the company’s prospects.
Third, both insiders have a wealth of experience within the financial industry. Rupert Robson has been Chairman at Sanne Group for six years and he has held many high-level positions within the financial sector, including at TP ICAP and HSBC. James Ireland has only been at Sanne Group for two and a half years but he was a senior analyst at Investec previously and advised Sanne Group on their listing. He is therefore likely to know the company extremely well.
As a result of Covid-19, Sanne Group faced headwinds in 2020. Transactions levels fell and this meant that the company had to trim back its revenue forecasts which stalled the momentum in the share price.
However, the company’s latest update was reassuring. Underlying EPS is expected to be in line with its latest guidance for the full-year and underlying cash conversion was above 90% for the prior period. The company also advised that there were new business wins in Q4 and that trade was resilient.
“Sanne remains confident that the medium and long-term prospects for the industry are compelling and continues to focus on ensuring the Group is well-placed to take advantage of the significant structural growth drivers in its markets,” management said in a statement.
As a result of this more encouraging news, we see the recent insider buying activity as bullish. We believe the insiders are confident that the share price currently undervalues the company’s prospects.