12-month performance: -19% Insider activity: Bullish Buying pattern: Large purchase from future Chairman Recent news: Provided Covid-19 update
Prudential is an international financial services company that offers a range of retail financial products and services. After demerging its European asset management business in 2019, the company is now predominantly focused on serving customers in Asia, however, it also has operations in the US. It is listed on the London Stock Exchange and currently has a market capitalisation of £31.7 billion.
Prudential recently issued a reassuring Covid-19 update. While total Annual Premium Equivalent (APE) sales for the first quarter fell 24% due to Covid-19 disruptions, APE sales outside of Hong Kong and China increased 1% for the period. In terms of its financial position, Prudential advised that it was in a ‘robust’ position with an estimated shareholder surplus of $11.1 billion and a shareholder cover ratio of 302 per cent as of 31 March 2020. "Prudential continues to invest and innovate to meet important needs for our consumers and has a highly resilient business model. While we cannot say with certainty how the Covid-19 outbreak will impact the global economy and hence how Prudential may be impacted, we believe we are well positioned over the long term both to weather the disruption caused by the pandemic, and to support our customers and communities in the recovery to come," said Mike Wells, Group Chief Executive.
Source: 2iQ Research
What has caught our attention here is the fact that on 24 June, Non-Executive Director Shriti Vadera purchased 67,500 Prudential shares at a price of £12.01 per share, spending over £800,000 on stock. Vadera – who is currently Chair of Santander UK Group Holdings – is expected to succeed Paul Manduca as Prudential’s Chair on 1 January 2021. We see this large insider purchase as a bullish signal. It suggests that the insider is confident about the future and expects Prudential’s share price to rise.
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