Insider Buying

Insider Buying Report: SAP SE (SAP:GR)

On a blue grey background, there is a white circle in the left with a laptop and a cup of tea, and different charts are printed on the remainder of the background, with the SAP logo in between the charts.
SAP SE
(SAP:GR)
12 months:
+5%
Activity:
Bullish
Pattern:
Large purchase from Chairman
News:
Strong cloud growth
SAP SE
(SAP:GR)
12 months:
+5%
Activity:
Bullish
Pattern:
Large purchase from Chairman
News:
Strong cloud growth

When a top-level insider makes a large purchase of company stock, investors should take note. It’s not a stretch to say that these individuals are some of the most informed participants in the market.

In this report, we are going to highlight some interesting insider buying at SAP SE (SAP:GR). SAP is a multinational software company that develops enterprise software to manage business operations and customer relations. It is the largest European software business by revenue. The company is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €137.8 billion.

SAP SE: Insider Buying

Our insider transaction data shows that on January 28, Chairman Hasso Plattner bought 929,001 shares at a price of €107.65 per share. This trade cost the insider just over €100 million and increased his holding to 75.67 million shares.

The graph represents SAP SE' price history, with significant buy and sell events highlighted.

Top-Level Insider

Mr. Plattner is very much a top-level insider. One of the founders of SAP, he has served as Chairman of the Supervisory Board since May 2003. In this role and as Chief Software Advisor he concentrates on defining the medium and long-term technology strategy of the company. Previously, he served as CEO of the group. Given his background, he is likely to have an excellent understanding of the company’s prospects.

What stands out about this purchase from Mr. Plattner is the size of the trade. The fact that the insider has spent over €100 million on stock suggests he’s confident the stock is going higher.

It’s worth noting that several other insiders have purchased stock here recently too. For example, on February 1, CFO Luka Mucic picked up 900 shares at a price of €111.78 per share. Meanwhile, on January 14, Supervisory Board member Rouven Westphal snapped up 2,500 shares at a price of €118.93 per share. This indicates that insiders are in agreement that the stock is set to move higher.

Strong Cloud Growth

SAP’s recent full-year 2021 results showed that the company is seeing strong growth in its cloud division right now.

While overall revenue was only up 2% to €27.8 billion, cloud revenue was up 17% to €9.4 billion. This growth in the cloud segment helped push non-IFRS EPS up 25% year on year to €6.74.

Looking ahead, the cloud division appears to have plenty of room for growth. At the end of 2021, the cloud backlog was €9.4 billion, up 32% year on year. Meanwhile, SAP advised that it is targeting 26% growth in cloud revenue at constant currencies

“The magnitude of our cloud strength is evident. More and more companies are choosing SAP to help them transform their businesses, build resilient supply chains and become sustainable enterprises as they move to the cloud. Our growth acceleration points to even greater potential ahead,” said CEO Christian Klein.

“We are confident that we will continue our Q4 current cloud backlog growth in 2022. This is reflected in our accelerated cloud guidance for 2022 as we make great progress towards our mid-term ambition,” added CFO Luka Mucic.

In light of the progress, SAP is making on the cloud front, we see the insider buying here as a bullish indicator.

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