12-month performance: -35% Insider activity: Bullish Insider buying pattern: Purchases from Chairman & CEO Recent news: Lower H1 turnover due to Covid-19
Company insiders such as corporate executives and directors tend to have the most up-to-date information on their companies’ prospects. If they’re buying stock, it’s generally a positive development. With that in mind, today we are going to highlight some recent director deals at Vitec Group (VTC:LN). Vitec is a UK company that specialises in image capture solutions. Its customers include broadcasters, film studios, photographers, and independent content creators. It is listed on the London Stock Exchange and currently has a market capitalisation of £336 million.
What stands out to us here is that this month, three insiders at Vitec Group have purchased shares: ● On 7 August, CEO Stephen Bird purchased 10,000 shares at £6.54 per share ● On 7 August, Independent Director Penny Duncan purchased 2,000 shares at £6.55 per share ● On 10 August, Chairman Ian McHoul purchased 5,000 shares at £6.83 per share
Source: 2iQ Research
The buying pattern looks interesting for a number of reasons. Firstly, the fact that both the CEO and the Chairman have purchased shares is a good sign. These two top-level insiders are likely to have a very good understanding of the company’s future prospects. The Chairman’s purchase looks particularly interesting. It has increased the size of his holding by 50%. Secondly, it’s the first time that three or more insiders have purchased Vitec shares within a week for several years.
Confident about the future
Vitec has been impacted by the coronavirus quite significantly with film and scripted TV productions suspended, sporting events postponed, and professional photographers impacted by lack of travel and events. Revenue for the first half of the year was down 35%. Year to date, the stock has fallen more than 30%. However, looking ahead, management appears to be confident about the future. "We expect our end markets to recover and for us to come through this period with an enhanced competitive position, well placed to return to growth. Although the pace and shape of the recovery in our markets is hard to predict, and it remains difficult to provide financial guidance for the full year, we currently expect trading conditions to continue to significantly improve," said CEO Stephen Bird earlier this month. The recent director deals we have observed here suggest that company insiders are genuinely confident about the future. We see the recent pattern of insider buying as a bullish signal.
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