Insider Buying

Insider Buying Report: Spirax-Sarco Engineering PLC (SPX:LN)

Spirax-Sarco Engineering PLC
(SPX:LN)
12 months:
+2.69%
Activity:
Bullish
Pattern:
Large purchase from board member
News:
2021 results
Spirax-Sarco Engineering PLC
(SPX:LN)
12 months:
+2.69%
Activity:
Bullish
Pattern:
Large purchase from board member
News:
2021 results

If a corporate insider is spending a substantial amount of money on company stock, it’s usually worth taking a closer look. Insiders tend to have the latest, most-up-to-date information on their companies, and their stock purchases can provide valuable trading signals.

In this report, we are going to highlight some interesting insider buying at Spirax-Sarco Engineering PLC (SPX:LN). Spirax-Sarco is an industrial engineering company that’s focused on thermal energy management. The company, which operates in over 130 countries worldwide, provides a diverse range of industrial customers with vital products, services, and engineered solutions to maximize efficiency and overcome their process challenges. It is listed on the London Stock Exchange and currently has a market capitalization of £8.95 billion.

Spirax-Sarco Engineering PLC: Insider Buying

Our insider transaction data shows that on April 14, board member Jane Kingston bought 1,580 SPX shares at a price of £125.00 per share. This trade cost the insider approximately £200,000 and increased her holding to 5,480 shares.

High-Conviction Trade

This trading activity is worth highlighting for a couple of reasons. Firstly, the trade is substantial both in nominal and relative terms. We can see that it has increased the size of the insider’s holding by a significant 41%. This suggests that Ms. Kingston is confident the stock is set to move higher.

Secondly, Ms. Kingston has made well-timed purchases in the past. Our data shows that the insider last purchased SPX shares in August 2020 when the stock was trading near £107. She also bought stock in 2018 when it was trading near £56. Since these transactions, the stock has traded as high as £172.

Strong Growth Expected In 2022

Spirax-Sarco shares have had a decent pullback recently.

However, full-year 2021 results, posted in March, showed that the company continues to generate solid growth.

For the year, revenue was up 17% year on year to £1,345 million. Meanwhile, adjusted earnings per share were up 32% year on year to 338.9p. On the back of this performance, the group raised its full-year dividend by 15% to 136p per share.

Looking ahead, management was confident that the company can continue to generate growth, noting that it had a record closing order book across all three of its businesses.

"Our robust business model and disciplined execution of our strategies have underpinned the resilience of our performance throughout economic cycles, so we remain confident in our ability to navigate the growing uncertainties ahead. For 2022 we currently anticipate strong sales growth, driven by record order books and continued global Industrial Production growth. While adjusted operating profit growth will be reduced by the full-year impact of revenue investments in 2021, we currently anticipate the adjusted operating profit margin in 2022 will still be comfortably above pre-pandemic levels," said CEO Nicholas Anderson.

In light of the strong results here, and upbeat outlook statement, we see the insider buying as a bullish indicator.

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