12-month performance: -40% Insider activity: Bullish Insider buying pattern: Purchases from CEO and CFO Recent news: Solid Q2 results
Top-level insiders tend to have the most up-to-date information on their company’s operations. These individuals are way ahead of analysts when it comes to business trends and their transaction activity can provide investors with valuable insights.
Today, we are going to highlight some interesting insider buying at SP Plus Corporation (SP:US). SP Plus is a leading provider of parking management and ground transportation services in the US. The company is listed on the NASDAQ Global Select Market and currently has a market capitalization of $474 million.
What looks interesting here is the fact that in August, both President and CEO Marc Baumann and CFO Kristopher Roy purchased SP Plus stock. Form 4 filings show that Baumann acquired 5,000 shares on 13 August at a price of $18.95 per share, while Roy purchased 3,100 shares on 21 August at $19.51 per share. These two purchases boosted the insiders’ holdings by 8% and 26% respectively.
Source: 2iQ Research
This insider transaction activity stands out to us for a few reasons. Firstly, these are top-level insiders buying stock. These two executives are likely to have an excellent understanding of the company’s near-term prospects.
Secondly, this buying activity represents the largest amount of insider buying at SP Plus within a quarter for several years. This is a positive development. Third, our Insider Model rates this buying activity as very bullish.
SP Plus has been impacted by the coronavirus. Financial results for the second quarter reflected the substantial reduction in activity within the aviation and hospitality industries this year.
However, there were some positives in the Q2 results. The company was able to make substantial cost reductions throughout the quarter, and as a result, it achieved positive free cash flow of $13 million despite a large drop in gross profit.
Moreover, SP Plus advised that activity has been rising recently. “We saw a progressive pick-up in activity throughout the quarter as businesses reopened in line with the easing of pandemic-related restrictions,” said Baumann.
SP Plus shares are down around 50% this year. The CEO and CFO clearly see value after that drop. We see their insider buying as a bullish signal.
Disclaimer: Neither 2iQ Research GmbH nor its content providers are responsible for any damages or losses arising from any use of this information.
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