Company insiders are some of the most informed participants in the market. Insiders sell company stock for many reasons. But they only buy stock for one reason – they expect it to go up.
Today, we are going to highlight some interesting insider buying at Invesco Ltd (IVZ:US). Invesco is an independent investment management company that has a strong presence in the retail and institutional investment management markets across North America, Europe, the Middle East, Africa, and the Asia-Pacific. It is listed on the New York Stock Exchange and currently has a market capitalization of $5.2 billion.
What has caught our attention here is a large trade by CEO Marty Flanagan. Form 4 SEC filings show that on 1 September, the insider purchased 290,300 IVZ shares at a price of $10.19 per share. The total cost of the transaction was $2.96 million.
Source: 2iQ Research
Large CEO purchase
This particular insider purchase stands out for a couple of reasons. Firstly, it’s a large purchase both in nominal and relative terms. It’s the largest insider purchase at Invesco for a number of years. It has also increased the size of Flanagan’s holding by 129%.
Secondly, Flanagan has an above-average long-term trading IQ of 115. This indicates that he has a good track record – from a long-term investing perspective – when it comes to timing his trades.
Solid Q2 results
Invesco stock remains well below its 2020 highs. Year to date, IVZ is down around 37%. However, Invesco issued a relatively solid set of Q2 results. Adjusted EPS increased to $0.35 from $0.34 in the first quarter, while ending assets under management (AUM) increased 8.7% to $1,145 billion. The company also advised that its institutional pipeline has grown to record levels.
Having spent $3 million on IVZ stock, Flanagan clearly sees value at current levels. We view this insider buying as a bullish signal.