Insiders at smaller firms often earn large profits from their stock purchases. This is because stocks in this area of the market are less researched, meaning there’s more potential for explosive moves to the upside.
In this report, we are going to highlight some interesting insider buying at a small US company, Super League Gaming Inc (SLGG:US). Super League Gaming offers an e-sports platform that allows amateur gamers to connect, play, and view games in real-time. Its platform, which serves 1.1 million creators, attracts around 70 million monthly active players. The company is listed on the NASDAQ Capital Market and currently has a market capitalization of $81 million.
Super League Gaming Inc: Insider Buying
Our insider transaction data shows that multiple insiders at Super League Gaming have snapped up stock in the last month.
Between December 28 and December 29, board member Mark Jung bought 25,000 shares at an average price of $2.29 per share.
More recently, board member Michael Keller picked up 44,000 shares at a price of $2.33 per share.
Combined, these two insiders spent around $160,000 on SLGG stock.
One thing that stands out about this buying activity is that Mr. Keller has increased his position size significantly. Before this trade, the insider owned 137,301 shares, so his purchase of 44,000 shares has increased the size of his holding by 32%. This suggests that he is very confident the stock is set to move higher. It’s worth noting that Mr. Keller was previously a managing director of Tiedemann Wealth Management, so he has an investment background.
The fact that two board members have purchased stock within a few weeks of one another also suggests that there’s a consensus of opinion within the boardroom that the stock is undervalued right now.
Explosive Revenue Growth
Super League Gaming’s Q3 results showed that the company continues to grow at a rapid rate.
For the quarter ended 30 September 2021, total revenue came in at a record $3.6 million, up 402% compared to Q3 2020, with increases in all primary revenue streams. Meanwhile, advertising and sponsorships revenue was up 689% year on year to $2.4 million.
While the group posted a proforma net loss of $5.5 million for the quarter, it noted that as of September 30, it had $24.5 million of cash on the balance sheet and no debt.
Looking ahead, management was very confident that the company can continue to grow.
“We have so much rich opportunity ahead for growth. As we sharpen our focus on the key mega trends – the supremacy of the metaverse, the democratization of content creation and the emergence of creator and player-based economies – we are well-positioned as a modern, scalable platform for advertisers and a home for creators who wish to turn their passion into their livelihood,” said CEO Ann Hand.
In light of the strong growth here, and the confidence from the CEO, we see the insider buying as a bullish indicator.