Insider Buying

Insider Buying Report: Winpak Ltd (WPK:CN)

Winpak Ltd
(WPK:CN)
12 months:
-8%
Activity:
Bullish
Pattern:
Purchases from multiple insiders
News:
Q3 results
Winpak Ltd
(WPK:CN)
12 months:
-8%
Activity:
Bullish
Pattern:
Purchases from multiple insiders
News:
Q3 results

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 cluster buying at Winpak Ltd (WPK:CN). Winpak is a global packaging company that manufactures and distributes high-quality packaging materials and innovative packaging machines. Its packaging solutions are primarily used for the protection of perishable foods, beverages, pharmaceuticals, and personal care. It is listed on the Toronto Stock Exchange and currently has a market capitalization of CAD $2.4 billion.

Winpak: Insider Buying

Our records show that between December 6 and December 24, nine insiders at Winpak purchased stock.

The largest purchases over the period were from:

  • Chairman Antti Aarnio-Wihuri (50,000 shares @ CAD $36.77 per share)
  • CFO Larry Warelis (7,000 shares @ CAD $35.69 per share)
  • Independent Director Bruce Berry (15,000 shares @ CAD $34.99 per share)

In total, the insiders spent about CAD $1.7 million on stock.

The graph represents Winpak Ltd' price history, with significant buy and sell events highlighted.

Buying From Top-Level Insiders

This cluster buying pattern is worth highlighting for a couple of reasons. Firstly, the cluster contains buys from several top-level insiders including the Chairman and the CFO. These insiders are likely to have deep insight into the company’s operations.

Secondly, the insiders have spent a substantial amount of money on company stock. This suggests they are very confident the stock is set to move higher. It’s worth noting that our data shows that these purchases represent the largest amount of insider buying at Winpak within a quarter for over a decade.

Gross Margins to Recover in 2022

Winpak has been impacted by higher costs recently.

For the third quarter of 2021, for example, net income fell to USD $21.35 million from $27.37 million a year earlier, despite the fact that revenue increased to $254.2 million from $210.6 million. The company blamed substantially higher raw material costs, along with elevated freight and distribution costs for the decline in profit.

However, in the Q3 results, Winpak said that it expects the higher costs to moderate in the near term. “Current market views are that the inflated resin and supply chain prices should start to slowly retract in the fourth quarter and decrease further during 2022,” it wrote in the results. As a result of this forecast, the company said that it expects gross margins to recover in Q4 and continue recovering in 2022. It added that selling price increases would assist in uplifting the gross margins.

In light of the expected recovery in margins here, we see the insider buying as a bullish indicator.

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