Insider Buying

Insider buying: Swedencare CEO purchases $120k worth of stock

Swedencare AB
(SECARE:SS)
12 months:
-68.18%
Activity:
Bullish
Pattern:
Purchase from CEO & Chairman
News:
H1 results
Swedencare AB
(SECARE:SS)
12 months:
-68.18%
Activity:
Bullish
Pattern:
Purchase from CEO & Chairman
News:
H1 results
The image's background depicts an adult golden retriever taking a bath, with the blog introduction mentioning the 2 insider's investment of SEK 2.454M on top.

CEOs tend to have a deep level of insight into their companies’ operations and financials. If they’re buying company stock, it’s generally a sign that business performance is strong, and that the outlook for the stock is attractive.

In this report, we are going to highlight a large CEO purchase at Swedencare AB (SECARE:SS). Swedencare today is an entrepreneurial and fast-growing pet health care company with a number of strong brands and a global presence. Its goal is to establish itself as the leading company within the pet health market. It’s listed on the Stockholm Stock Exchange and currently has a market cap of SEK 7.15 billion.

Insider buying at Swedencare

Our data shows that on September 23, CEO Hakan Lagerberg purchased 30,000 shares at a price of SEK 44.85 per share. Then, on September 26, Chairman Hakan Svanberg picked up 25,000 shares at a price of SEK 44.345 per share. Combined, the two insiders invested SEK 2.454 million (approx. USD $218,000) in Swedencare stock.

Top-level insider

Mr. Lagerberg is likely to know the company well, as he has served as CEO since 2014. The fact that he is adding to his position now suggests that he believes the market is not pricing the stock correctly at present.

It’s worth noting that Mr. Lagerberg isn’t the only top-level insider to buy stock here recently. In late July, President of the Board Hakan Svanberg picked up 10,500 shares at a price of SEK 70.10 per share.

Long-term tailwinds

Swedencare’s recent H1 results were a little underwhelming.

While net revenue Q2 was up 194% to SEK 470.9 million thanks to recent acquisitions, organic growth was just 4%, compared to 45% a year earlier. Growth was impacted by larger retail and veterinary customers trimming their inventory levels as well as weak conditions in China.

Yet there were some positives in the results. Not only did the company see strong growth in its online division (NaturVet’s Amazon sales increased by 37% year on year while Pet MD Brands’ sales increased by 30%), but it also managed to increase margins despite inflationary pressures, with gross margin (56.1%) hitting its highest level since Q3 2020.

Looking ahead, the company expects to benefit from major pet market-related tailwinds. In the US (where the company primarily operates) the pet market is forecast to grow from $100 million to $275 million between 2020 and 2030.

In light of the long-term growth drivers here, we see the insider buying as a bullish indicator.

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