Taylor Wimpey PLC (TW/:LN)
12-month performance: -35%
Insider activity: Bullish
Insider buying pattern: Purchases from Chairman & CEO
Recent news: Lower H1 turnover due to Covid-19
A CEO has deeper insight into their own company’s operations than any outside analyst or fund manager could ever hope to obtain. Quite simply, they are the smart money. This means that if they’re buying stock, it’s worth taking note.
With that in mind, today we are going to highlight recent CEO buying at Taylor Wimpey (TW/:LN). Taylor Wimpey is one of the largest residential property developers in the UK. Founded in 2007, it now has over 20 regional offices across the UK. The company is listed on the London Stock Exchange and is a member of the FTSE 100 index. The market capitalisation of the company is £4.4 billion.
An insider purchase at Taylor Wimpey that looks interesting to us is a recent large purchase from CEO Pete Redfern. Our records show that on 12 August, the insider purchased 624,049 TW/ shares at a price of £1.19 per share. The total cost of this purchase was approximately £743,000.
Source: 2iQ Research
Large CEO purchase
This director deal stands out to us for several reasons.
Firstly, it’s a substantial purchase both in nominal and relative terms. This purchase has boosted Redfern’s holding by approximately 32%. This suggests that he believes the stock is undervalued.
Secondly, Redfern is not the only insider to purchase Taylor Wimpey shares recently. On 12 August, Chair Irene Dorner also purchased shares. She made a smaller purchase of 41,475 shares, spending roughly £50,000 on stock. The fact that two top-level insiders have purchased stock within a short space of timing is a positive development, in our view.
Confident about the future
Taylor Wimpey has experienced a challenging year so far as a result of Covid-19. Its performance has been impacted by the closing of building sites and sales centres. Year to date, the stock is down about 40%.
However, the FTSE 100 company has now reopened all of its sites safely and returned to a sustainable level of sales and build. And management appears to be confident about the future.
“Looking ahead, balance sheet strength, a long order book and our high quality and growing landbank gives us confidence in our ability to navigate the challenges and emerge stronger from the pandemic,” said Redfern recently.
Redfern’s recent purchase of 624,049 Taylor Wimpey shares suggests that he is genuinely confident about the future. We see this CEO purchase as a bullish signal.