Insider Buying

Insiders at Aviva PLC just invested £600k in stock

Aviva PLC
(AV/:LN)
12 months:
-24.70%
Activity:
Bullish
Pattern:
Purchases from multiple insiders including CEO
News:
Gilt market volatility
Aviva PLC
(AV/:LN)
12 months:
-24.70%
Activity:
Bullish
Pattern:
Purchases from multiple insiders including CEO
News:
Gilt market volatility
The image's background depicts two children standing near cliff water, with the blog introduction mentioning the multiple insider's investment of £600K on top.

‘Cluster buying’ is a particularly strong insider buying signal. This is where multiple insiders at the same organization are purchasing company stock simultaneously.

In this report, we are going to highlight a cluster buying pattern at Aviva PLC (AV/:LN). Aviva is a UK-based insurance and investment management company. Operating predominantly in the UK, Ireland, and Canada, it currently has around 18.5 million customers. It’s listed on the London Stock Exchange and has a market cap of £11.19 billion at present.

Insider buying at Aviva

Our data shows that on September 30, three insiders at Aviva bought stock. Those who purchased shares were:

  • CEO Amanda Blanc (25,704 shares @ £3.89 per share)
  • CEO of UK & Ireland Life Doug Brown (115,723 shares @ £3.89 per share)
  • CEO of Aviva Investors Mark Versey (12,927 shares @ £3.85 per share)

Combined, the three insiders invested around £600,000 in company stock.

Top-tier insiders

What stands out here is that the three insiders that have purchased stock are all top-tier insiders. Top-tier insiders generally have a superior level of information on their businesses, so these purchases are notable. It’s worth noting that Amanda Blanc’s last purchase, in March 2022, was timed very well.

Additionally, this is the first cluster buying pattern here in over three years. This suggests that the insiders see a high level of value right now.

Gilt market volatility

Aviva shares recently experienced a sharp fall on the back of surging gilt yields.

Aviva operates in the LDI (liability driven investment) space, and the volatility in the gilt markets would have resulted in the need to stump up extra capital to meet margin calls on gilt derivative positions. This has created uncertainty in relation to the company’s balance sheet and liquidity.

The chances are though, this has had a limited impact on the business due to its capital strength. As Moody’s analyst Brandan Holmes said after gilt yields surged: “Many UK life insurers would have faced cash calls to satisfy variation margin requirements on their interest rate hedge positions this week – this would have been most meaningful for insurers with large annuity books – however we expect this to be manageable given their strong liquidity buffers.”

It’s worth noting that since the sharp spike in gilt yields, rival Legal & General has advised that it was able to handle the volatility without any challenges.

The activity from insiders here suggests that they believe Aviva’s liquidity position is fine and that the recent share price fall has created a buying opportunity.

We see this insider buying as a bullish indicator.

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