When we see multiple insiders at the same company buying stock simultaneously, we always take a closer look. This buying pattern – which is called ‘cluster buying’ – is a particularly strong insider trading signal.
In this report, we are going to highlight some recent cluster buying at Watches of Switzerland Group (WOSG:LN). Watches of Switzerland is a UK retailer that sells luxury watches. Operating through its own-branded Watches of Switzerland stores, as well as its Mappin and Webb, Mayors, and Goldsmiths stores, it sells watches from a range of manufacturers including Rolex, Omega, and Tag Heuer. The company is listed on the London Stock Exchange and currently has a market capitalization of £2.64 billion.
Watches of Switzerland Group: Insider Buying
Our insider transaction data shows that between March 25 and March 28, three insiders at Watches of Switzerland bought stock. Those who picked up shares were:
- Chairman Ian Carter (8,700 shares @ £11.46 per share)
- Senior independent non-executive director Tea Colaianni (8,818 shares @ £11.22 per share)
- Independent non-executive director Robert Moorhead (6,557 shares @ £11.35 per share)
Combined, the three insiders spent around £275,000 on company stock.
Insider Trading Skill
This cluster buying pattern is worth highlighting due to the fact that previous cluster buys here have been timed very well.
Last year, we noted that four insiders (including the three listed above) purchased WOSG stock on April 1 at prices of between £6.63 per share and £6.85 per share. Over the next nine months, the stock surged higher on the back of strong earnings, hitting a high of around £16 in early January 2022. Clearly, the insiders were able to see that business trends were strong, and they were able to capitalize on those trends.
Demand Outstripping Supply
Watches of Switzerland’s most recent trading update, for the 13 weeks to 30 January, showed that the group still has a lot of momentum.
For the period, group revenue amounted to £348.1 million, up 28% year on year. Meanwhile, sales of luxury watches were up 21% year on year. The group noted that demand for luxury watches continues to be “very strong” in both the UK and the US, consistently exceeding supply.
On the back of these strong results, the group raised its guidance for the full-year ending May 2, 2022. It now expects full-year revenue and profit to be towards the top end of the upgraded guidance announced on November 9, 2021.
"Strong trading to date, revised pricing by certain brands and visibility of supply for calendar 2022 all support our expectation to perform towards the top end of our full year guidance. Demand in our category continues to outstrip supply and we remain confident in the future of our business and achieving the goals laid out in our Long Range Plan," said CEO Brian Duffy.
The group added that it has an exciting pipeline of confirmed store projects for the remainder of the fiscal year, including three new mono-brand boutiques in the UK.
In light of the strong results here, we see the insider buying as a bullish indicator.