Corporate insiders tend to see business trends way ahead of everyone else. If these individuals are buying company stock, it can pay to take a closer look.
In this report, we are going to highlight some interesting insider buying at Technicolor SA (TCH:FP). Technicolor is engaged in the supply of digital product services to content creators, pay-television operators, and network service providers. It is listed on the Euronext Paris stock exchange and currently has a market capitalization of €610 million.
Technicolor: Insider Buying
Our records show that this month, two top-level insiders at Technicolor have purchased stock. On 7 April, Executive Committee member David Patton bought 58,289 shares at a price of €3.07 per share, spending €178,947 on stock. Then, on 12 April, COO Tim Spence purchased 47,895 shares at a price of €3.14 per share, spending €150,390 on stock.
This insider activity is worth highlighting because it comes on the back of some large purchases from CEO Richard Moat in December. At the time, we said that these purchases looked bullish. Since then, the stock has risen around 50%. These recent purchases suggest that management believes the stock can keep climbing.
It’s worth noting that both Patton and Spence are highly experienced insiders. Patton joined Technicolor in April 2019 after several years at Young & Rubicam, a WPP company, where he was Global President. Spence, meanwhile, has over 18 years of experience in the communications industry having held various roles at T-Mobile UK. Both insiders have experience in digital transformation. This means they are likely to have a good read on Technicolor’s prospects.
Technicolor’s full-year 2020 performance was ahead of previously communicated guidance. For the year, EBITDA came in at €167 million, with H2 EBITDA more than doubling H1 EBITDA, while EBITA was €(56) million – better than the €(64) million expected. Over the year, the company generated permanent cost savings of €171 million.
Looking ahead, the group said that it will be focused on continuing the execution of its transformation program – which gained “significant momentum” in 2020 – and advised that 2021 and 2022 will be years of “substantial financial improvement.” For FY2021, Technicolor now expects adjusted EBITDA of around €270 million and adjusted EBITA of around €60 million.
In light of this expected improvement in performance, we see insider buying here as bullish.