Top-level corporate executives tend to have an information advantage over other investors. If these insiders are buying company stock, it’s generally a bullish development.
Here, we are going to highlight an insider purchase at The Pebble Group PLC (PEBB:LN). The Pebble Group is a UK company that provides products, services and technology to the promotional products industry. The business is split into two segments: Brand Addition and Facilisgroup. At present, around 90% of revenues come from Europe and North America. It’s traded on the London Stock Exchange’s AIM market and currently has a market capitalization of £263 million.
The Pebble Group PLC: Insider Buying
Regulatory filings show that on 11 June, the Chairman of the Board at The Pebble Group, Richard Law, purchased 66,000 PEBB shares at a price of £1.53 per share. This purchase cost the insider approximately £100,000 and increased his holding by approximately 22%.
This insider purchase caught our attention for a couple of reasons. Firstly, our data shows that the Chairman has a good trading record. Over the last 14 months, he has picked up stock on two separate occasions at prices significantly below the current levels. This latest purchase increases his holding by over 20% which suggests that he is confident the shares will rise further.
Secondly, the insider has a wealth of experience in related sectors. Whilst CEO of technology firm GB Group, the company rose from a market capitalization of £5 million to £500 million. This suggests his input will be invaluable and that he has the experience to identify companies that can grow exponentially.
The Pebble Group recently delivered an upbeat AGM statement that reassured investors that the company is making good progress in both of its divisions. In Brand Addition, the company’s order intake was strong with total sales orders invoiced or received coming to £64.8 million for the first 5 months up until the end of May. This was an increase of 29% compared to the same period in 2019.
Partner numbers rose at Facilisgroup to 186 from 175 at the end of December, with four more signed up under contract. The gross merchandise value moving through the company’s technology was in line with expectations. The GMV value for the first five months of 2021 was 116% of the total achieved in the same period in 2019, demonstrating the business has recovered well post after being hit by Covid-19.
A brief update from the Board was positive in tone. “The Board is pleased to say that the positive start to the new financial year, which was reported in the Group's Final Results 2020 announced on 23 March 2021, has continued, with the business performing well and in line with management expectations. The Board remains excited in the prospects for the Group and looks forward to fully updating shareholders on its progress when issuing the Half Yearly Results for the six months to 30 June 2021 on 7 September 2021.”
Given this positive momentum within the business, we see the recent insider trading as bullish. It suggests that the insider believes that this will translate into a higher share price in the near future.