Corporate executives and directors have the most information on their companies. If these insiders are buying company stock, it’s often worth taking a closer look.
In this report, we are going to highlight some insider buying at Team17 PLC (TM17:LN). Team17 is a UK-based independent video game developer. Its games – which are available on multiple platforms – include Worms Rumble, Narita Boy, Monster Sanctuary, and Overcooked! The company is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and currently has a market capitalization of £1.01 billion.
Team17: Insider Buying
Our insider transaction data shows that on 8 July, two insiders at Team17 purchased stock. The largest purchase was from Non-Executive Director Martin Hellawell, who purchased 10,000 shares at a price of £7.92 per share. CFO Mark Crawford made a smaller purchase, buying 4,403 shares at a price of £8.00 per share.
Bullish Director Dealing
These insider trades stand out due to their size. While they are not particularly large in nominal terms, they are large in relative terms. Our data shows that these two purchases represent the largest amount of insider buying within a quarter at Team17 for several years.
Additionally, both trades have increased the size of the insiders’ positions significantly. Hellawell’s purchase has increased his holding from zero shares to 10,000 shares while Crawford’s purchase has increased his holding from 6,911 shares to 11,314 shares. This suggests that both insiders are confident that TM17 stock is set to mo0ve higher.
It’s worth noting that both of these insiders have considerable experience in the technology sector. Hellawell – who was appointed Non-Executive Director in September 2019 – is currently Chairman of Softcat PLC, a leading provider of IT infrastructure products and services. Meanwhile, Crawford – who joined the company in late 2019 – was previously CFO of TP Group plc, an AIM-listed specialist technology consulting business.
Team17 posted a strong set of full-year 2020 results in March. For the year, revenue was up 34% to £83.0 million while profit before tax was up 36% to £26.2 million. Basic adjusted earnings per share were up 34% to 18.2p.
Looking ahead, there appears to be plenty of potential for further growth. Team17 advised that it has a “solid and diverse pipeline of launches for 2021 and beyond” and that it is well positioned to continue to deliver on its growth plans. It added that the year had started well and that the expansion of both major new consoles and distribution platforms underpins management's optimism about the future of gaming given its unique mixture of technology and entertainment.
Since the full-year results, Team17 has announced the acquisition of StoryToys for $26.5 million. StoryToys is a developer and publisher of educational entertainment (edutainment) apps for children. The acquisition is expected to be immediately earnings accretive.
In light of these developments, we see the insider buying here as a bullish indicator.