Cluster buying is defined as three or more insider trades made in a short period of time. Investors should pay attention when a group of top-level insiders make large purchases within their own company. These shareholders are amongst the most proactive and informed within the market.
Three businesses experienced significant insider buying clusters in October 2021.
1. Jungheinrich AG (JUN3:GR)
Jungheinrich is a German company, offering an extensive catalogue of automated guided vehicles, forklifts, storage systems, batteries, and digital tools. Listed on Deutsche Börse’s Xertra, the business has a market capitalization of €1.9 billion.
In late October 2021, 2iQ reported on Jungheinrich’s insider trading:
- CFO Volker Hues (2,500 JUN3 shares)
- Supervisory Board member Andreas Wolf (5,000 JUN3 shares)
- Chairman of the Supervisory Board Hans Georg-Frey (1,000 JUN3 shares)
The most significant purchase in this cluster is Supervisory Board Member Wolff Lange, who purchased 230,000 JUN3 shares between €43.14 and €45.12 per share, spending around €10 million.
This cluster buying amounted to around €1.05 million spent on FTK stock and can certainly be identified as a bullish pattern.
This cluster contains multiple top-level insiders, spending a cumulative €11 million on JUN3 stock. We consider this a bullish cluster, especially when factoring in previously well-timed investments by Wolf and Lange in January 2021, rising by 30% over three-and-a-half months.
Jungheinrich looks to continue its upward trajectory, anticipating higher demand for material handling equipment and automated systems as the year progresses.
2. Nordic Entertainment Group AB (NENTB:SS)
Over to Sweden for our next entry, as we look at Nordic Entertainment cluster buying activity from September 2021, which 2iQ reported on in early October 2021. The group provides broadcast television and streaming services throughout Scandinavia, and is listed on the Stockholm Stock Exchange with a market capitalization of SEK 37.5 billion.
The following insiders made trades in September 2021:
- Head of Corporate Communications Robert Alenius (650 NENTB shares)
- President and CEO Anders Jensen (2,150 NENTB shares)
- Chair Pernille Erenbjerg (3,980 NENTB shares)
In total, these investments cost the Nordic insiders around SEK 3.3 million. Previous cluster buying activity for NENTB shares has previously proven to be very bullish signals. Trades from November 2020 saw a 32% increase in value.
This latest cluster is particularly worth tracking, as it includes both the CEO and the Chair of the company, two top-level insiders. The company’s encouraging updates target a sales growth of approximately 18-20% over the next five years.
3. Banca Ifis SpA (IF:IM)
Banca Ifis is an Italian bank, a leader in the unsecured small-ticket segment and a significant player in the Italian non-performing loan (NPL) market.
2iQ reported on the sizeable trading activity of three Banca Ifis insiders between September 27 and October 1, 2021:
- Group Capital Markets Director Saverio Bonavita (7,950 IF shares)
- Group Legal and Corporate Affairs Director Lucia Martinoli (3,000 IF shares)
- Board member Ricardo Preve (91,388 IF shares)
Purchasing stock between €15.98 and €16.99 per share, these insiders spend around €1.7 million on IF shares. This a substantial amount of money, implying the insiders are incredibly enthusiastic about the stock’s prospects.
Secondly, these insiders are very experienced. Bonavita, for instance, served as the CFO of Unipol Banca for over ten years. Martinoli has worked for Banca Popolare di Intra, Veneto Banca Group, and Intesa Sanpaolo in the past. Preve is now the Chairman of the Board of Directors of Ifis Rental Services S.r.l., a 100% owned rental company by Banca Ifis.
Not only are the careers of these insiders extensive, but so is there investment history. They previously made well-timed trades in June and July 2021, for which their shares increased by 30%.
We see this activity as a bullish indicator.
For more reports on cluster buying for the month of October 2021, check out the following:
Read more cluster buying reports on the 2iQ blog.