Insiders at Tryg Buy Stock After Share Price Fall

If multiple insiders at the same organization are buying company stock simultaneously, it’s often worth taking a closer look. This buying pattern – which is known as ‘cluster buying’ – is a particularly strong insider trading signal.

In this report, we are going to highlight a cluster buying pattern at Tryg A/S (TRYG:DC). Tryg is a Danish insurance company that offers insurance products for the private, commercial, and corporate markets. With activities in Denmark, Norway, and Sweden, and over three million customers, the group is one of the largest non-life insurance companies in the Nordic region. The company is listed on the OMX Nordic Exchange Copenhagen and currently has a market capitalization of around DKK 86.5 billion.

Cluster Buying

Our data shows that on July 11, three insiders at Tryg purchased stock. Those who bought shares were:

• Supervisory board member Thomas Hofman-Bang (7,403 shares @ DKK 134.80 per share)

• Supervisory board member Elias Bakk (1,000 shares @ DKK 134.80 per share)

• Supervisory board member Mengmeng Du (1,000 shares @ DKK 137.80 per share)

Combined, the insiders invested around DKK 1.3 million (approx. $190,000) in the company.

Bullish Trading Activity

What stands out here – apart from the fact that three insiders purchased stock on the same day – is that all of the insiders have increased the size of their holdings significantly with their trades. Mr. Hofman-Bang’s trade increased the size of his holding by 153%. Meanwhile, the trades from Mr. Bakk and Ms. Du increased their positions by 40% and 100% respectively. This suggests that the insiders see a lot of value in the stock right now.

Share Price Fall

Tryg shares have experienced weakness recently on the back of the company’s Q2 results. Negatively impacted by higher weather claims, Tryg generated a profit of DKK 1.76 billion for Q2 – around 4% below the consensus forecast of DKK 1.83 billion.

Analysts at Citi believe the recent share price weakness is excessive, however. They think Tryg has sufficient levers to generate margin improvement and see scope for a positive surprise on the underlying claims ratio in Q3. As a result, they have upgraded the stock to a ‘buy’ rating, citing an attractive valuation and limited downside risk from here.

Clearly, the insiders also see a buying opportunity after the recent share price fall. We view the insider activity as a bullish development.