Top-level insiders such as CEOs and Chairmen tend to have an excellent understanding of their companies’ operating activities. If they’re buying company stock, it’s often a sign that the outlook for the business, and the share price, is attractive.
In this report, we are going to highlight a large Chairman stock purchase at Elmos Semiconductor SE (ELG:GR). Elmos Semiconductor develops, manufactures, and markets semiconductors and sensors, primarily for the automotive industry. Its components communicate, measure, regulate and control safety, comfort, powertrain, and network functions. The company is listed on Deutsche Börse’s Xetra and currently has a market capitalization of approximately €1.03 billion.
Insider Buying at Elmos Semiconductor
Our data shows that between November 9 and November 14, Chairman of the Supervisory Board Klaus Weyer purchased 37,829 bearer shares at an average price of €50.36 per share. This cost the insider just under €2 million.
There are unlikely to be many people who have a better understanding of Elmos Semiconductor than Mr. Weyer. He co-founded the company in 1984 and initially served as its Managing Director before serving as the Chairman of the Management Board. Since 2006, he has been a member of the Supervisory Board.
It’s worth noting that Mr. Weyer is not the only insider at Elmos Semiconductor to buy stock recently. In late September, COO Guido Meyer bought 2,100 shares at a cost of around €82,000.
Full-year Guidance Raised
Elmos is performing better than a lot of other semiconductor companies at the moment due to its exposure to the automotive sector.
For Q3, the company reported sales of €119.6 million, up 48% year on year. EBIT came in at €29.8 million versus €13.6 million a year earlier with EBIT margin rising from 16.8% in Q3 2021 to 24.9%.
On the back of these results, the company raised its guidance for 2022. It now expects sales of more than €440 million (previous guidance: €430 million) and an EBIT margin of 23% ± 2 percentage points (previous guidance: 21% ± 2 percentage points).
“In a challenging environment, we performed extremely well in the third quarter of 2022 and have raised our full-year guidance. The continued high demand for Elmos integrated circuits is an excellent basis for our business going forward,” said CEO Dr. Arne Schneider.
“The market for automotive semiconductors is set for considerable growth due to the increasing electrification of all vehicle systems and functions. Our innovative solutions will enable us to benefit from these structural developments over the long term,” he added.
In light of these results, and the confidence from the CEO, we see the insider buying here as a bullish signal.