If multiple insiders are buying company stock, it can often be worth investigating the stock further. This buying pattern – which is called ‘cluster buying’ – is a particularly strong insider trading signal.
In this report, we are going to highlight a cluster purchase at Taaleri Oyj (TAALA:FH). Taaleri is a Finnish financial services company that provides solutions in relation to wealth management, corporate financing, and renewable energy investing. The company is listed on the OMX Nordic Exchange Helsinki and currently has a market capitalization of €323 million.
Taaleri: Insider Buying
Our insider transaction data shows that between 10 May and 18 May, five insiders at Taaleri bought stock. Among those who purchased shares were Founder and Chairman Juhana Elomaa and Group CEO Robin Lindahl. In total, the five insiders purchased 46,487 TAALA shares, spending a little over €850,000 on the stock.
Bullish Cluster Purchase
This insider transaction activity stands out for a few reasons. Firstly, a number of top-level insiders have purchased stock. Insiders such as Founder and Chairman Juhana Elomaa and Group CEO Robin Lindahl are likely to have a good read on the company’s recent performance.
Secondly, several of these insiders have high Trading IQs, meaning they have timed their purchases well in the past. Both Elomaa and Lindahl have excellent long-term Trading IQs of 114.
Finally, it’s worth pointing out that the last time we observed a cluster purchase here, in late 2019, the stock performed very well in the short term.
Focused on Renewable Energy
Taaleri’s recent first-quarter results were solid. For the period, income from continuing operations in accordance with IFRS amounted to €12.1 million, compared to -€2.2 million in the same period last year. Meanwhile, earnings per share were €0.13 for continuing operations, versus -€0.30 in Q1 2020. On the back of these results, the company proposed the distribution of funds of EUR 1.00 per share.
During the quarter, the company announced the sale of its wealth management operations to Aktia Bank Plc for €120 million. As a result of the transaction, Taaleri will recognize a capital gain of approximately €110 million. The group advised that going forward, growth will be driven by private equity funds focused on renewable energy and other alternative investments. Its vision is to be a Nordic forerunner in alternative investments focusing on sustainability and its goal is to achieve continuing earnings growth of at least 15% per year.
In light of these results, we see the cluster buying here as bullish.