One of the most bullish insider transaction patterns is ‘cluster buying.’ This is where three or more insiders have purchased company stock within a short period of time.

In this report, we are going to highlight some recent cluster buying at Tritax Big Box REIT PLC (BBOX:LN). Tritax Big Box is a British real estate investment company that owns a portfolio of large-scale logistics warehouses. These warehouses are let out to retailers such as Amazon, Tesco, and Marks & Spencer. It is listed on the London Stock Exchange and currently has a market capitalization of $3.8 billion.

Tritax Big Box REIT: Insider Buying

Our data shows that between May 5 and May 6, three insiders at Tritax bought stock. Those who picked up shares were:

• Chairman Aubrey Adams (20,000 shares @ £2.18 per share)

• Board member Alistair Hughes (11,483 shares @ £2.18 per share)

• Board member Elizabeth Brown (9,340 shares @ £2.13 per share)

In total, the three insiders spent around £90,000 on stock.

Following the purchases of Board Members, five A-level investment Managers bought 158,723 shares altogether, at a price of £2 per share.

Bullish Buying Pattern

While these insider trades aren’t particularly large in nominal terms, we still see them as significant.

One reason for this is all three insiders are likely to have a good understanding of the company’s investment potential. Both Mr. Adams and Mr. Hughes have substantial experience in the real estate industry. The former has nearly 40 years of experience in the industry at board level and was previously SEO of Savills. Meanwhile, the latter has 30 years of experience in the UK and internationally, and was previously Managing Director at Jones LaSalle Inc. As for Ms. Brown, she has a background in private equity and M&A.

Another reason we see this trading activity as significant is that Mr. Adams has a good track record when it comes to buying company stock. Our data shows that in recent years, the insider has made a number of well-timed purchases. As a result, he has a long-term Trading IQ of 119, which is very high.

Strong Demand

In Tritax’s first-quarter results, posted on May 4, management was optimistic about the future.

It noted that demand from a broad range of occupiers for new logistics space remains “very strong” and said that it was well positioned to capitalize on the near-record levels of occupier demand for high-quality logistics space though its development pipeline.

In terms of inflation, the company said that it was mitigating much of the construction cost inflation in its near-term development pipeline through its specialist approach to procurement, locking in fixed-price building contracts. It added that its active management of open market rent reviews, along with inflation-linked leases and strong occupier demand provided a good degree of inflation protection.

However, the upbeat commentary from management was not enough to stop the slide in the share price here, which began in late April after e-commerce giant Amazon told investors that it had a surplus of warehouse space. Since the Q1 results, the stock has continued to underperform.

The recent buying from insiders here indicates that they see value after the recent share price fall and that they expect the stock to bounce back. We see the insider buying here as a bullish indicator.