A number of academic studies have found that insiders at small-cap firms tend to make the largest profits from their stock purchases. This is not surprising – small-cap stocks tend to have more growth potential than large-cap stocks.
In this report, we are going to highlight an interesting insider purchase in a US small-cap company, Super League Gaming Inc (SLGG:US). Super League Gaming is a technology company that offers an e-sports platform. This platform allows amateur gamers to connect, play, and view games in real-time. The company is listed on the NASDAQ Capital Market and currently has a market capitalization of $143 million.
Super League Gaming Inc: Insider Buying
Our records show that on 12 April, board member Michael Keller – Super League’s eighth-largest shareholder – bought 17,000 SLGG shares at a price of $6.06 per share. This purchase – which cost the insider a total of $103,200 – increased his holding to 117,301 shares from 100,301 shares.
The Largest Insider Trade for Several Years
This insider trade stands out for a couple of reasons. Firstly, it’s a large purchase in nominal terms. Our data shows that it is the largest insider purchase at Super League Gaming for several years.
Secondly, this purchase has increased the size of Keller’s holding by 17%. This suggests he is confident the stock is set to move higher.
Super League Gaming’s recent fourth-quarter and full-year 2020 results were very impressive. For the fourth quarter, revenue came in at a record $779,000, up 197% compared to Q4 2019. Meanwhile, for the full year, revenue was $2.1 million, up 90% year on year. During the year, registered users nearly tripled to 2.9 million while total engagement hours rose to 72 million compared to 15 million in 2019.
Looking ahead, the company was optimistic about the future, particularly in relation to its recent acquisition of livestreaming company Mobcrush, which it believes will position the company for ‘step-function’ increases in revenues.
“With this acquisition we are building a formidable, highly scalable gaming-centric media and advertising platform that reaches one of the largest addressable audiences of gamers in the US. The revenue opportunities available through our combined advertiser solutions, as well as growth in direct gamer and content monetization, are tremendous. We expect 2021 to be a break-out year as we capitalize on our position in the dynamic world of competitive video gaming,” said CEO Ann Hand.
In light of this confident tone from management, we see the insider buying here as bullish.