Corporate insiders have access to real-time information on business trends that outsiders don’t have access to. If these individuals are buying company stock, it is generally a bullish signal.
In this report, we are going to highlight some insider buying at SGL Carbon SE (SGL:GR). SGL Carbon is a manufacturer of products and solutions based on carbon fibers and specialty graphites. Its products are used in the automotive, aerospace, and solar and wind energy industries, as well as by manufacturers of semiconductors, LEDs, and lithium-ion batteries. The company is listed on Deutsche Börse’s Xetra and currently has a market capitalization of €1.02 billion.
SGL Carbon: Insider Buying
Our insider transaction data shows that recently, two top-level insiders at SGL Carbon have purchased stock. On 21 June, CFO Thomas Dippold purchased 15,200 shares at a price of €6.63 per share. This transaction cost the insider €101,000. Then, on 22 June, Chairman and CEO Dr Torsten Derr bought 10,000 shares at a price of €6.58 per share. This purchase cost the insider €66,000.
Derr’s purchase increased the size of his holding by 7% while Dippold’s purchase increased the size of his holding by 25%.
Insider Trading Skill
Both of these insiders have made well-timed purchases in the recent past. In November of last year, for example, both bought shares when the stock was trading around the €3.20 to €3.30 level. Since then, the stock has risen about 150%.
More recently, both insiders bought stock in January of this year when it was trading below €5. Combined, they spent around €450,000 on shares. Since then, the stock has risen to €8.30, generating substantial profits for the insiders.
The recent purchases suggest that the insiders expect the stock to continue rising.
SGL Carbon posted a solid set of first-quarter results in May. For the quarter, EBIT came in at €17.0 million, up from €6.4 million in Q1 2020. Meanwhile, the company achieved a positive net result of €6.1 million compared to minus €4.3 million in the prior-year period. The group advised that it is making very good progress in its restructuring and transformation program and that it is seeing higher levels of demand in some areas of the business.
"Our first quarter results show that we are delivering despite the continued headwinds in some of our markets,” commented CEO Dr Torsten Derr.
Looking ahead, SGL Carbon confirmed its 2021 guidance and said that it expects ‘noticeable’ sales and earnings growth this year. It added that it is now pursuing a clear 'margin before volume' strategy that is focused on profitability.
In light of these results, we see the insider buying here as a bullish indicator.