Company insiders have access to real-time information on their businesses and often also have a wealth of experience and knowledge to help them evaluate their firms’ prospects. If they are buying company stock, it’s generally worth taking a closer look.
In this report, we are going to highlight a large insider purchase at Swedbank AB (SWEDA:SS). Swedbank is a Swedish bank that provides financial services and products in Sweden, Estonia, Latvia, and Lithuania. In total, it serves around 7.3 million private customers and 550,000 corporate customers. It’s listed on the Stockholm Stock Exchange and currently has a market capitalization of SEK 210 billion.
Swedbank AB: Insider Buying
Our data shows that on October 26, Swedbank board member Goeran Bengtsson purchased 179,000 shares at a price of SEK 194.27 per share. This trade cost the insider SEK 34.8 million (approx. $4.0 million) and increased the size of his holding to 296,500 shares.
This trading activity is worth highlighting for several reasons.
Firstly, Mr. Bengtsson has a banking background. Currently, he is CEO of Swedish bank Falkenbergs Sparbank, which works closely with Swedbank. Previously, he was Regional Head of Credit at Swedbank. This background means he is likely to have a good understanding of Swedbank’s prospects.
Secondly, Mr. Bengtsson has made well-timed purchases in the recent past. Back in April, the insider picked up 116,500 shares at a price of SEK 147.6 per share. Since then, the stock has risen as high as SEK 197.
Recent news regarding Swedbank has been positive.
On October 21, the group posted Q3 results that beat forecasts. For the period, profit amounted to SEK 5.50 billion, which was well above the consensus forecast of SEK 5.1 billion. On the back of this strong performance, the bank proposed an additional dividend of SEK 7.30 per share. In terms of the outlook, CEO Jens Henriksson said that he looks to the future with confidence.
Then, on October 26, Swedbank announced that the Swedish financial regulator, the Swedish Financial Supervisory Authority (FSA), had cleared the bank of wrong-doing in a market abuse probe. Last year, the FSA opened a market abuse investigation into the bank in the wake of the money-laundering scandal in the Baltics.
In light of these developments, we see the insider buying here as a bullish indicator.