Company insiders will often have real time information on their company’s prospects. If they’re buying shares, it’s generally a bullish development.
Here, we are going to highlight multiple insider purchases by board members at Siemens Healthineers AG (SHL:GR). Siemens Healthineers develops, manufactures, and distributes imaging, diagnostic, and advanced therapies products and services to healthcare providers worldwide. It’s listed on the Frankfurt Stock Exchange and currently has a market capitalization of €51.8 billion.
Siemens Healthineers: Insider Buying
Regulatory filings show that from 25 March to 30 March multiple insiders at Siemens Healthineers bought stock. On 25 March, a member of the Supervisory Board, Peer Schatz, purchased 12,500 SHL shares at a price of €45.27 per share. This purchase cost Schatz approximately €565,000. Another Supervisory Board member, Andreas Hoffman, also purchased 900 SHL shares at a price of €45.73 per share. Then, on 26 March, an Executive Board member, Christoph Zindel, purchased 2,200 SHL shares at a price of €46.15 per share. The Chairman of the Supervisory Board, Ralf Thomas, purchased a total of 20,000 SHL shares from 25 March to 31 March, which costed him around €900,000.
The insider buying at Siemens Healthineers is interesting because multiple insiders are buying at once. This tells us that there is a strong consensus within the company that the shares are undervalued. Additionally, our data shows that CEO Bernhard Montag purchased stock in late February and there was a trend of insider buying throughout 2020, which suggests that insider sentiment is positive.
It’s also worth noting that Peer Schatz’s purchase is for a significant monetary value. This suggests he is very confident that the share price will rise.
Revenue Guidance Increased
Siemens Healthineers produced strong Q1 results across the business with the core business returning to growth as demand for its services increased. Revenue grew 13% year on year with diagnostics seeing 23% growth. The adjusted EBIT margin grew to 19.1% which was up 550 basis points compared to the year prior. Basic earnings per share when adjusted were €0.49 compared to €0.36 a year ago. Free cash flow of €668 million was more than double the amount generated in Q1 last year. Outlook in 2021 was raised to 8%-12% comparable revenue growth versus previous guidance of growth of 5%-8%.
“We started into the new fiscal year with an outstanding quarter. Our comprehensive portfolio of imaging and diagnostics enables us to make important contributions in helping healthcare providers around the globe to master this pandemic successfully, impressively underlining our impact on society. Against the backdrop of the positive developments in the first quarter, we are raising our outlook for fiscal year 2021,” said CEO Bernd Montag.
On the back of these excellent results, we see the insider buying here as bullish. It suggests a number of insiders believe that the momentum will continue within the business and the share price will continue to rise.