Semiconductor firms have experienced volatility and pullback in the stock market recently, largely due to the pandemic and global shortages.
But longer-term drivers such as demand, growth, profitability, and sustained stock price increases could offset this short-term volatility and provide opportunities for patient investors.
One region that repeatedly shows promising signs for investors is the Nordic stock market. And in the semiconductor industry in particular, Nordic Semiconductor (NOD:NO) is a good example of this.
A Look Back at Nordic Semiconductor in 2019/2020
Nordic Semiconductor is a Norwegian technology company that develops wireless communication solutions.
It saw significant insider buying activity when 2iQ last reported on the company in April 2020, September 2020, and October 2020, and since then, the company’s stock price has surged.
Here’s an overview of what has happened since our last reports.
Insider Buying Activity and Stock Price Increases
July 2019 - September 2020
There was significant insider buying activity at this time, and this suggested that the insiders involved believed the stock was undervalued at the time.
For example, Chairman Birger Steen, along with other top-level insiders have consistently bought stock in the company.
What is crucial to note here about Birger Steen in particular, is that he has a good track record for timing his purchases. 2iQ’s data shows that Steen generally buys stock before significant rises in the share price.
This is shown through his purchases in 2019. On 11 July 2019, he bought 25,000 shares at a price of NOK 39.20 per share.
In the 12 months since July 2019, the stock rose approximately 120%. He purchased stock again in April 2020, and then it rose around 70% in the next three months from then.
This confidence continued with two insider transactions on 9 September 2020:
- Chairman Birger Steen, who bought 2,000 NOD shares at a price of NOK 88.99 per share.
- Non-Executive Director Jan Frykhammar, who picked up 6,000 shares at a price of NOK 87.90 per share. This purchase increased his holding by 37%.
Between September 2020 and October 2020, the stock rose again as much as 29%. 2iQ saw more insider purchasing from Steen since then.
Our data shows that on 21 October 2020, Steen added 5,000 shares to his holding. He paid NOK 113 per share (approximately 13% above the then share price). The total cost of the purchase was NOK 565,000 (approximately USD $61,000).
Looking back, this was certainly a bullish signal. The company had momentum, and insiders clearly had sustained belief and confidence that stock would continue to rise.
Fast forward to July 2021, and NOD:NO’s share price has been trending towards the NOK 300 barrier.
The stock price has been rising for months since these insiders purchased their stock.
This indicates more of the same for the coming year and 2020/2021 report.
More from 2iQ Data on Investable Companies in Profitable Industries
This example of a large increase in stock prices and interesting past insider buying activity at Nordic Semiconductor fortifies the value that 2iQ’s data provides investors.
To find out more about how stock prices have performed since we reported on insider buying, including more companies in the Nordic region, visit the blog.