12-month performance: +79% Insider activity: Bullish Insider buying pattern: Large CEO purchase Recent news: Good Q2 results
When it comes to generating alpha, there are few predictive factors more significant than insider transactions. No one has more information in relation to a company’s future prospects than its leaders.
With that in mind, today we are going to highlight some significant insider buying at Vivint Smart Home Inc (VVNT:US). Vivint Smart Home is a technology company that provides integrated smart home solutions to customers in North America. Its solutions include home security systems, home automation systems, and lighting control systems. The company is listed on the New York Stock Exchange and currently has a market capitalisation of $3.4 billion.
Insider buying: $1 million CEO purchase
The insider buying activity that looks interesting here is two recent purchases from CEO Todd Pedersen. Form 4 filings show that the insider made two large purchases of VVNT stock between 12 August and 13 August. We have listed the CEO’s purchases below: ● 12 August: 20,959 shares @ 17.64 per share ● 13 August: 32,417 shares @ 19.36 per share
The total cost of these two trades was just under $1 million.
Source: 2iQ Research
These CEO buys stand out to us for a few reasons.
Firstly, Pedersen is the founder of Vivint Smart Home. Under his leadership, the company has evolved from a dynamic start-up to the leading smart home services company in North America. This means he is likely to have a very good understanding of the company’s growth prospects.
Secondly, Pedersen’s purchases are substantial. Combined, they have boosted the CEO’s holding by 65%. In addition, Pederson has demonstrated superior timing when it comes to buying shares in the past. The last time Pederson purchased VVNT stock was in May. At the time, he made three purchases between $11.61 and $12.93 per share. Since then, the stock has risen to $18.
Good Q2 results
Vivint Smart Home issued a good set of Q2 results on 6 August. For the quarter, revenue increased 8.9% year on year to $306 million. Meanwhile, adjusted EBITDA increased by $64.4 million year on year to $152.7 million. On top of this, the group raised its outlook for full year 2020 and said that it expects to be cash flow positive in 2020.
All things considered, we see these CEO purchases as a bullish signal. They suggest that the insider is confident about the future.
Disclaimer: Neither 2iQ Research GmbH nor its content providers are responsible for any damages or losses arising from any use of this information.
Getting the most of Insider Trading Data - Free Book