Insider transactions can provide investors with extremely valuable insights. Corporate insiders are some of the most informed participants in the market and research has shown that their trading activity can be an excellent predictor of future stock performance.
Here, we are going to highlight the 10 stocks that saw the highest levels of insider buying during the first quarter of 2021. All of these stocks registered insider purchases of €15 million or more over the period. Given the high level of buying activity in these companies, we think they are probably worth a closer look right now.
1. Sandvik AB (SAND:SS)
Value of shares purchased: €88 million
Who bought shares: Johan Molin (Chairman), Claes Boustedt (Director), Industrivärden (10% owner), L E Lundbergforetagen (investment company represented on board)
Sandvik is a Swedish engineering company that operates in the areas of mining and rock excavation, metal cutting, and materials technology. It’s listed on the Stockholm Stock Exchange and currently has a market capitalization of SEK 296 billion.
Sandvik looks well placed to benefit from the rebound in global economic activity. Recently, it advised that demand in its long-cycle mining business is strong. It also said that the pace of recovery that was noted at the beginning of October continued throughout the fourth quarter.
Recent insider buying here looks very bullish. A large purchase from the Chairman on 4 March looks particularly interesting. This purchase doubled the size of his holding.
2. KONE Oyj (KNEBV:FH)
Value of shares purchased: €72.6 million
Who bought shares: Antti Herlin (Chairman)
KONE is a global leader in the elevator and escalator industries. The company is listed on the OMX Nordic Exchange Helsinki and currently has a market capitalization of €31.8 billion.
KONE posted a solid set of full-year 2020 results in February. For the year, adjusted EBIT was up 4% to €381 million – 3% ahead of analysts’ forecasts. As a result of this performance, the group proposed an extraordinary dividend of €0.50 per share. This extraordinary dividend suggests that management is confident about the outlook.
During Q1, Chairman Antti Herlin – the majority shareholder – made several large purchases here, spending over €70 million stock. We see this insider buying activity as bullish.
3. Bouygues SA (EN:FP)
Value of shares purchased: €55 million
Who bought shares: SCDM SAS (family holding company)
Bouygues is a French company that operates in the construction, media, and telecom industries. The group has operations in over 90 countries and employs over 130,000 people in total. It’s listed on the Euronext Paris stock exchange and currently has a market capitalization of €13.1 billion.
In Bouygues recent full-year 2020 results it said that it saw a ‘sharp rebound’ in H2 after H1 was substantially impacted by the pandemic. It also advised that 2021 sales and earnings should be ‘well above’ those of 2020. A dividend of €1.70 per share was declared, reflecting the group’s confidence in its future.
This is a stock we covered last year in July. At the time, SCDM SAS had just spent €34.5 million on the stock. We saw this as a bullish signal. Since then, the stock has climbed but not by a lot. Nevertheless, we see the latest insider purchases as bullish. They suggest that insiders continue to believe that the stock is undervalued right now.
4. JDE Peet’s NV (JDEP:NA)
Value of shares purchased: €53.9 million
Who bought shares: Chris Brighton (Vice President), Olivier Goudet (Chairman), Peter Harf (Director), JAB Holdings (family holding company)
JDE Peet's is the world's largest pure-play coffee and tea company by revenue. Its brands include L’OR, Jacobs, Moccona, and Kenco. The company is listed on the Euronext Amsterdam stock exchange and currently has a market capitalization of €15.8 billion.
JDE Peet’s shares have underperformed this year. After starting the year at €37, the company’s share price has fallen to €31.50. It would appear that insiders see value in the stock after the pullback.
In Q1, there were some very large buys from JAB Holdings (an investment company that specializes in consumer goods), Chairman Olivier Goudet (Managing Partner at JAB), director Peter Half (also Managing Partner at JAB), and Vice President Chris Brighton.
5. LVMH Moet Hennessy Louis Vuitton SE (LVMH:FP)
Value of shares purchased: €52.0 million
Who bought shares: Bernard Arnault (Chairman)
LVMH is a French luxury goods company that owns approximately 70 brands across the fashion, perfume & cosmetics, watches & jewelry, and alcoholic beverage industries. The stock is listed on the Euronext Paris stock exchange and currently has a market capitalization of €299 billion.
LVMH shares recently rose to record highs after the company posted strong sales figures for Q1. For the quarter, like-for-like sales rose by 30% year-on-year to €14 billion. Recently, a number of brokers have raised their price targets here. Cowen and Company, for example, raised its price target to €640 from €610.
During Q1, Chairman Bernard Arnault made a number of large purchases. These were timed well. The insider is already sitting on a nice profit.
6. Landos Biopharma Inc (LABP:US)
Value of shares purchased: €29.9 million
Who bought shares: Konstantin Poukalov (Director), Perceptive Advisors LLC (10% owner), RTW Investments LP (investment company represented on board)
Landos Biopharma is a clinical-stage biopharmaceutical company that is focused on the discovery and development of oral therapeutics for patients with autoimmune diseases. It is listed on the NASDAQ Global Market and currently has a market capitalization of $422 million.
Landos Biopharma came to the market in February this year via an Initial Public Offering (IPO). Since then, the stock has underperformed, falling from the IPO price of $16 to around $10.
What’s interesting is that Perceptive Advisors LLC and RTW Investments LP – two of the company’s three largest shareholders – have taken advantage of this share price weakness to increase their holdings. This suggests they are confident the stock will bounce back.
7. Ocado Group PLC (OCDO:LN)
Value of shares purchased: €19.3 million
Who bought shares: John Martin (Director), Rick Haythornthwaite (Chairman-elect), Jorn Rausing (Director), Julie Southern (Director)
Ocado is a UK company that offers online grocery services and warehouse automation solutions. It is listed on the London Stock Exchange and currently has a market capitalization of £16 billion.
Ocado delivered a very strong performance in 2020. For the year ended 29 November 2020, retail revenue was up 35.3% while total group revenue was up 32.7%. Total group EBITDA was up 69%. Meanwhile, in a trading update for the 13 weeks to 28 February, the group reported retail revenue growth of 40%. Since the start of February, however, Ocado’s share price has fallen.
In Q1, several insiders purchased stock here. The largest purchase was from director Jorn Rausing (who has a background in M&A), who spent £16.3 million on stock. This buying activity suggests that insiders expect the stock to rebound.
8. Ironwood Pharmaceuticals Inc (IRWD:US)
Value of shares purchased: €19.0 million
Who bought shares: Sarissa Capital Management LP (10% owner), Edward Owens (Director)
Ironwood Pharmaceuticals is a healthcare company that is focused on the development and commercialization of gastrointestinal (GI) products. Its key product is linaclotide, an IBS product marketed under the name of LINZESS in the US and Mexico and CONSTELLA in Canada and Europe. The company is listed on the NASDAQ Global Select Market and currently has a market capitalization of $1.7 billion.
Ironwood delivered a solid performance in 2020. For the period, adjusted EBITDA was up 9% while Non-GAAP net income was up 49%. Looking ahead, the company was optimistic in relation to its growth prospects, stating that it has a “tremendous opportunity” to maximize LINZESS through innovative commercial strategies.
Between 26 February and 10 March, Ironwood’s fourth-largest shareholder, Sarissa Capital Management, spent about $23 million on stock. This suggests the investment manager is confident the stock can go higher.
9. Pierer Mobility AG (PMAG:SW)
Value of shares purchased: €17.0 million
Who bought shares: Stefan Pierer (Chairman/CEO)
Pierer Mobility is an Austrian company that manufactures motorcycles. Its products include traditional motorcycles and e-bikes. The company is listed on the SIX Swiss Exchange and currently has a market capitalization of CHF 1.8 billion.
Pierer Mobility has experienced very strong growth recently. In the first quarter of 2021, for example, revenue was up 82% to €509 million, while unit sales (motorcycles and e-bikes) were up 80% to 106,453. On the back of this strong growth, the company has increased its guidance for 2021.
In Q1, Chairman and CEO Stefan Pierer made a number of large purchases here. This indicates he expects the stock to continue rising.
10. Svenska Handelsbanken (SHBA:SS)
Value of shares purchased: €16.0 million
Who bought shares: Fredrik Lundberg (Vice-Chairman), L E Lundbergforetagen (investment company)
Svenska Handelsbanken is a Swedish bank that provides a broad range of banking services. It is listed on the OMX Nordic Exchange Stockholm and currently has a market capitalization of SEK 189 billion.
Svenska Handelsbanken’s recent results were solid. For Q4 2020, operating profit increased by 4% year on year to SEK 5,712 million while earnings per share increased to SEK 2.21 from SEK 1.68 a year earlier. Return on equity for the period was 10.9% versus 8.4% for the same period last year. Looking ahead, the company appears well placed to benefit from stronger economic conditions and higher interest rates.
During Q1, there were two large insider purchases here. Vice Chairman Fredrik Lundberg purchased 1 million shares on 4 February while investment company L E Lundbergforetagen purchased 1 million shares on 11 February. These purchases suggest the insiders see the stock as undervalued at present.