One of the most bullish signals in insider transaction analysis 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 an interesting cluster buying pattern at Globalstar Inc (GSAT:US). Globalstar is a satellite communications company that offers voice and data communication services. Headquartered in Covington, US, it provides wireless communications services in areas not served or underserved by terrestrial networks and in circumstances where terrestrial networks are not operational due to natural or man-made disasters. The company is listed on the New York Stock Exchange and currently has a market cap of $2.88 billion.
Insider buying at Globalstar
Our data shows that between September 9 and September 16, five insiders at Globalstar purchased stock at prices of between $1.69 and $1.83 per share. Those who bought shares were:
- CEO Dave Kagan
- Chairman James Monroe
- General Counsel L. Barbee Ponder
- Director Ben Wolff
- Director Keith Cowan
Combined, the five insiders bought 465,693 shares, investing a total of around $830,000 in Globalstar stock.
Cluster buying pattern
There are a couple of things that are worth noting about this cluster buying pattern.
One is that several top-level insiders are involved. Chairman James Monroe, CEO Dave Kagan, and General Counsel L. Barbee Ponder are all likely to have a good understanding of the company, and its prospects. It’s worth noting that Mr. Monroe has served as Chairman since 2004 and previously served as CEO of the company, so he is likely to have an excellent understanding of the business.
Another thing that stands out here is that this buying activity represents the first insider buying at Globalstar since December 2019. The fact that five insiders have stepped up to buy stock simultaneously suggests that something within the business has changed. Our Insider Model views this buying activity as bullish.
Globalstar recently confirmed that, going forward, it will be providing satellite services to smartphone manufacturer Apple.
In a regulatory filing, the group announced that Apple had selected the company as its partner for a feature that will allow iPhone 14 users to send emergency messages from remote locations.
Apple said that it was dedicating $450 million from its advanced manufacturing fund toward satellite infrastructure to support the feature, with Globalstar receiving most of the funding.
This deal is likely to be a game-changer for Globalstar. The company now expects to generate revenue of between $185 million and $230 million in 2023, depending on the degree to which it achieves goals tied to its Apple deal. Wall Street analysts had previously been expecting $131 million in revenue for 2023.
“The company expects these financial metrics to continue to improve significantly by 2026, which is expected to be the first full year in which the new satellites are operational, with total revenue expected to increase by approximately 35% compared to the 2023 forecast driven primarily by revenue growth under the Partnership Agreements,” Globalstar said.
In light of this deal, we see the insider buying here as a bullish indicator.