If multiple insiders are buying company stock within a short period of time, it’s often worth taking a closer look. This buying pattern – which is known as ‘cluster buying’ – is a particularly strong insider trading signal.
Here we are going to highlight ‘cluster buying’ at SSP Group PLC (SSPG:LN). SSP Group is a global foodservice company that operates food and beverage outlets in around 35 countries across the world. The company focuses on travel locations such as airports and railway stations. It’s listed on the London Stock Exchange and currently has a market capitalization of £2.28 billion.
SSP Group PLC: Insider Buying
Our insider transaction data shows that between February 7 and February 8, three insiders at SSP Group bought stock. Those who bought shares were:
- Chairman of the Board Michael Clasper (75,000 shares @ £2.69)
- Independent Director Kelly Kuhn (19,500 shares @ £2.74)
- Independent Director Apurvi Sheth (19,000 shares @ £2.80)
In total, the three insiders spent around £300,000 (approx. $408,000) on SSP Group company stock.
These insider trades caught our eye for a couple of reasons.
Firstly, all three of the insiders buying SSP Group stock have gained valuable experience within the food and beverage sector or the travel sector. This suggests they are well placed to identify factors that are likely to drive the SSP Group share price upwards. Mr. Clasper was formerly the CEO at airport operator BAA PLC and he has held a series of senior management roles at Proctor & Gamble Ltd. Apurvi Sheth has executive experience at global food and beverage companies such as Nestle and Coca-Cola and was an MD at Diageo in Southeast Asia. Kelly Kuhn was Chief Customer Officer at travel group CWT.
Secondly, the Chairman has increased his holding in the company by about 70%. This would suggest to us that he is extremely confident in the future prospects of SSP Group.
Given the continued disruption to the travel sector from Covid-19, SSP Group was pleased with the progress it made in the first four months of the financial year, covering the period 1 October 2021, to 30 January 2022.
Total group revenues for the first four months of the year were circa 62% of the levels achieved in 2019 before Covid-19 struck. The company saw trading improve as Covid-19 restrictions were gradually lifted. Whilst there was some softening on trading from the Omicron variant of Covid-19, the company has seen more encouraging signs lately. Sales are trending positively with the main driver being the railway sector as commuter travel returns towards more normal levels. The company currently has around 1,950 units open, which is about 72% of its estate. Underlying EBITDA was positive for the first quarter of the year and in February, the £300 million that had been drawn from the Bank of England under the Covid Corporate Financing Facility, was fully repaid.
“We are confident in our ability to manage any short-term volatility and, subject to no further government restrictions being introduced, we are well positioned for the important summer trading period. Our medium-term expectations, which are for a return to like-for-like revenues and EBITDA margins at broadly similar levels to 2019 by 2024, remain unchanged,” said the company.
Having read through SSP Group’s resilient trading statement and optimism for the medium-term, we see the recent insider buying at the group as bullish. It would suggest that the three insiders believe the company is well positioned for growth as the sector recovers and have taken the view that SSP Group’s shares will move higher.