One of the most bullish insider transaction patterns is ‘cluster buying.’ This is where three or more insiders at the same organization are buying company stock simultaneously.

In this report, we are going to highlight a cluster buying pattern at Byrna Technologies Inc (BYRN:US). Byrna Technologies is a non-lethal defense technology company that designs products for the military, law enforcement, private security, and civilians. The company is listed on the Nasdaq and currently has a market cap of $148 million.

Insider buying at Byrna Technologies

Our data shows that between October 6 and October 7, four insiders at Byrna Technologies bought stock at prices of between $5.04 and $5.34 per share. Those who picked up shares were:

• Chairman, President & CEO Bryan Ganz (26,960 shares)
• CFO David North (9,708 shares)
• Chief Strategy Officer Mike Wager (20,000 shares)
• Chief Marketing Revenue Officer Luan Pham (5,737 shares)

Combined, the insiders invested around $320,000 in BYRN stock.

C-suite insiders

What stands out here is that a number of top-level, C-suite insiders have purchased stock. These insiders are likely to have an excellent understanding of the company’s operations and prospects. Our Insider Model views this buying pattern as very bullish.

It’s worth noting that the CFO, Chief Strategy Officer, and Chief Marketing Revenue Officer have all boosted the size of the holdings significantly here. CFO David North, for example, has increased his holding from 2,381 shares to 12,879 shares. This suggests the insiders are very confident the stock is undervalued at present.

43% revenue growth

Byrna Technologies recently posted a solid set of Q3 FY2022 results.

For the period, revenue came in at $12.4 million, an increase of 43% year on year. Meanwhile, Non-GAAP adjusted EBITDA was $0.3 million compared to a loss of $(0.8) million for the period a year earlier. Gross margin for the quarter was 55.4%, bringing year-to-date gross margin to 55.0%.

Looking ahead, the company was optimistic about its prospects, although it acknowledged that economic conditions may result in lower sales growth next year. For Q4, it expects to generate revenue of $16.0 million to $18.0 million. This would be a new record for the company and, compared to the same period a year earlier, would represent 52% top-line growth at the midpoint of the range. It added that with operating expenses expected to be in line with the run rate of the last four quarters, it expects to be “solidly profitable" in Q4.

The company also noted that in FY2023, it expects to see continued growth in Amazon sales as it is gaining momentum on the e-commerce platform.

In light of this update, we see the insider buying here as a bullish indicator.