Insider transaction activity can offer a wealth of insight into publicly-listed companies. It’s not a stretch to say that insiders are some of the most informed investors in the market.
In this report, we are going to highlight an interesting insider purchase at Steelcase Inc (SCS:US). Steelcase is a US company that offers a range of workplace architecture, furniture, and technology products and services. It is listed on the New York Stock Exchange and currently has a market capitalization of $1.3 billion.
Steelcase Inc: insider buying
What has caught our attention here is a large purchase from Eddy Schmitt, Senior Vice President, Americas. Form 4 filings show that on 28 September, the insider – who is for responsible for sales and channel activities in North America and Latin America – purchased 30,000 shares at a price of $10.04 per share. The total cost of the transaction was $301,200.
Source : 2iQ Research
High Insider Model score
This insider purchase looks interesting for several reasons. Firstly, it is a large purchase, both in nominal and relative terms. It has lifted the insider’s holding from 59,161 shares to 89,161 shares – an increase of 51%.
Secondly, our records show that insiders at Steelcase do not purchase stock very often. Given the fact that insider purchases here are rare, our Insider Model rates this purchase as very bullish.
Share price fall
Steelcase shares are down nearly 50% this year. That’s not really surprising when you consider how many employees are working from home globally due to Covid-19. Steelcase’s revenue for the second quarter was down 18% on the same period last year. However, in the company’s second-quarter results, management indicated that conditions could be set to improve.
“As the number of Covid cases declined in Asia Pacific and EMEA, we saw a strong return to the office in those regions as companies utilize the workplace to drive higher productivity, increase collaboration and promote their culture," said Jim Keane. “As progress is being made in the US relative to the pandemic, we expect to see momentum build to bring employees back to work which will drive improved demand for our solutions to provide a better experience” he added.
This purchase from Schmitt appears to be a bet on the remodeling of the office environment post-Covid-19. Given the size of this insider purchase, we think the stock is worth a closer look right now.