Insider buying can offer clues in relation to a stock’s future trajectory. Insiders sell company stock for many reasons. But they only buy stock for one reason – they expect it to go up.
In this report, we are going to highlight some interesting insider buying at Wickes Group PLC. Wickes is a UK home improvement retailer that has over 200 stores across the country. Digitally-led, it operates a low cost, efficient, integrated business model. The company is listed on the London Stock Exchange and currently has a market capitalization of £656 million.
Wickes: Insider Buying
Our insider transaction data shows that earlier this month, Wickes’ Chairman Christopher Rogers purchased WIX stock twice. On 17 May, he bought 8,259 shares at a price of £2.50 per share. Then, on 18 May, he added another 31,741 shares at a price of £2.50 per share. In total, the Chairman spent around £100,000 on the stock.
Mr. Rogers has considerable industry experience. Previously, he served as a Non-Executive Director of UK home improvement retailer Travis Perkins from 2013 before stepping down following the demerger of Wickes earlier this year. Meanwhile, during his executive career, he held a number of senior roles at public companies, including senior finance roles at Kingfisher plc – which owns UK home improvement retailers B&Q and Screwfix. Given this experience, he is likely to have a good read on the industry, and Wickes’ prospects.
Wickes delivered a solid performance in 2020 during the pandemic. For the year, like-for-like revenue was up 5.0% to £1,347 million. However, operating profit margin declined to 6.1% from 7.4% in 2019 due to the disruption from Covid-19 restrictions.
Looking ahead, management appears to be confident about the future. In late March, management advised that while the economic outlook and trading environment remains uncertain, it expects to deliver sales growth ahead of its markets for the full year. It also advised that it is confident the company will see a recovery in its ‘Do it for me’ (DIFM) segment, with pent up demand likely to come through as lockdown restrictions ease. It added that the strong core sales seen in the second half of 2020 have continued this year.
In light of this outlook, we see the insider buying here as bullish.