Top-level corporate insiders such as CEOs and Chairman tend to have the most up-to-date information on their companies. If they’re buying company stock, it’s generally a sign that the outlook for the business, and its share price, is favorable.
In this report, we are going to highlight a large Chairman stock purchase at J D Wetherspoon PLC (JDW:LN). J D Wetherspoon is a UK-based pub and hotel operator. Founded in 1979, the company owns nearly 900 pubs as well as around 50 hotels. It is listed on the London Stock Exchange and currently has a market cap of around £894.8 million.
Large CEO Purchase
Our data shows that on September 1, J D Wetherspoon’s Chairman Tim Martin purchased 968,544 JDW shares at a price of 700p per share. This trade cost the insider around £6.8 million and took his total holding to 31,743,253 shares.
There are unlikely to be many people that have a better understanding of this business than Mr. Martin. He founded the company back in 1979 and has served as Chairman since 1983. Under his leadership, the company has grown from one pub in North London to nearly 900 pubs across the UK and Ireland today. Given his background, we think his large stock purchase is notable.
J D Wetherspoon’s last trading update, posted in July, showed that the company was doing well.
For the first 10 weeks of the final quarter of its financial year (ended July 31), the company generated like-for-like sales growth of 11% versus the last full financial year before the pandemic. Compared to FY2022, like-for-like sales increased 11.5% for the period.
In terms of guidance, management said that it expected profits for the full year to be in line with market expectations. However, it noted that as a result of a continued improvement in sales and a slightly reduced expectation for cost increases, it anticipated an “improved outcome” for the next financial year.
In light of this business momentum, we see the insider buying here as bullish.