In a new series from 2iQ, the leaders in corporate insider trading data, we explore the stock market performance of companies within a specific sector. In this first edition, we take a look at some recent 2iQ reports on semiconductor businesses.
Due to global events, global markets are experiencing increased volatility and there has been some pullback for semiconductor companies, mainly due to the pandemic and worldwide chip shortages.
Why Is It Worth Tracking the Trading Performance of Insiders Within a Sector?
Insiders have top level insight not just into their own companies, but also a strong understanding of their industry’s short to long-term prospects. Insiders may sell company stock for a multitude of reasons, but typically they only purchase stock when they feel the sector or company is going to grow.
From those purchases it is possible to denote broader insider sentiment within an overall industry. 2iQ offers free insider activity reports on a regular basis for a diverse range of sectors.
Elmos Semiconductor SE (ELG:GR)
Elmos is a German semiconductor and sensor firm that works in the automobile sector. It is traded on the XETRA exchange of Deutsche Börse and has a market value of €997.20 million.
In November 2020, 2iQ reported on a cluster purchase by insiders at Elmos Semiconductor, including:
- CFO Arne Schneider (ELG 10,000 shares)
- COO Guido Meyer (ELG 8,000 shares)
- Chief Sales Officer Jan Dienstuhl (ELG 1,100 shares)
Combined, these insiders spent around €425,630 on Elmos stock when it was worth between €20 - €24 per share.
Since this late 2020 cluster, ELG’s share price has more than doubled (as of March 2022). Elmos’ stock is currently valued at around €54.4 per share, which is around a 100% increase, meaning that November 2020 cluster would be valued at €1,039,040.
Cluster buying is a good indicator of a company’s senior team’s sentiment. This sentiment has proven to be well placed, as Elmos Semiconductor’s recently posted strong Q3 results.
Nordic Semiconductor (NOD:NO)
Nordic Semiconductor is a technology company located in Norway that specializes in wireless communication solutions. It has a market capitalization of NOK 46.345 billion and is listed on the Oslo Stock Exchange.
Nordic Semiconductor’s Chairman Birger Steen purchased 5,000 shares on October 21, 2020. The insider paid NOK 113 per share, in total costing NOK 565,000.
In our original report, we highlighted that the semiconductor firm was gaining a lot of traction, and a rise of insider investment suggested Steen was optimistic that the stock's value could increase even more.
Since October 2020, NOD shares have skyrocketed. As of March 2022, the stock price is sitting at around NOK 238.8 per share, double the share price from when Chairman Steen invested, making his investment worth around NOK 1,194,000.
Broadcom Inc (AVGO:US)
Broadcom is an international tech giant focusing on semiconductors and infrastructure software. It has a market capitalization of $245.4 billion listed on the NASDAQ Global Select Market.
On September 18, 2020, Co-Founder and Chairman of the Board Henry Samueli purchased 101,740 Broadcom shares. This was at a price of $361.45 per share, costing $36.8 million.
At the time of reporting, this purchase was his first in five years and was of an immense size. We suggested that, based on the company’s strong momentum, this was to be considered a bullish purchase.
Fast forward to March 2022, AVGO shares are worth around $610.41, with a peak in December 2021 of $672. Samueli’s $36.8 million investment in 2020 would today be worth around $62 million.
Check out the 2iQ blog for more stock price retrospective reports.