Insider buying can provide investors with valuable clues about a stock’s potential. Insiders sell company stock for many reasons. But they only buy stock for one reason – they expect it to rise in the future.
Here, we are going to highlight an insider purchase at Zumtobel Group AG (ZAG:AV). Zumtobel is an Austrian company that is focused on lighting technology. The company is engaged in the design, production, and sale of indoor and outdoor lighting systems and also offers project management services for turnkey lighting solutions. It’s listed on the Vienna Stock Exchange and currently has a market capitalization of €372 million.
Zumtobel Group AG: Insider Buying
Regulatory filings show that on 2 July, the Chairman of the Supervisory Board at Zumtobel Group, Karin Zumtobel-Chammah, bought 11,600 ZAG shares at a price of €8.75 per share. This purchase, which cost the Chairman approximately €120,000, increased her holding by 86%.
Large Increase in Holding
This trade caught our attention as it nearly doubled Zumtobel-Chammah’s holding. This suggests that she is extremely confident in the future prospects of the company. Additionally, our data shows that this is the first insider purchase at the company since the end of October, when a number of insiders picked up stock at lower levels.
It’s worth noting that Zumtobel-Chammah has been at Zumtobel Group since 1996 and has been heavily involved in marketing. She has been on the Supervisory Board since 2019. This experience means she is likely to know the company well.
Net Profit Trebles
Zumtobel Group posted an impressive set of full-year results for 20/21. For the year, net profit came in at €45.6 million, up from €14.5 million the year prior. Meanwhile, profit before tax was €34 million versus €22.7 million in the previous year. Overall, the results represented the best annual results since the 2010/2011 financial year.
The outlook for the company was very positive with the company stating: “The Management Board sees the Zumtobel Group well positioned for profitable growth and expects an increase of 4% to 7% in revenues and an EBIT margin of 4% to 5% for the 2021/22 financial year.” It added that it is now exiting a restructuring phase and is moving into a strategy focusing on growth.
Given the positive results and the optimistic outlook statement, we see the recent insider buying at Zumtobel Group as bullish. It would suggest that the insider continues to see upside to the current share price.