Top-level insiders such as CEOs and CFOs 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 its share price, is attractive.
In this report, we are going to highlight a stock purchase from a top-level insider at Jenoptik AG (JEN:GR). Jenoptik is a German photonics group. The company, which has over 4,000 employees worldwide, serves a number of industries including the semiconductor equipment, electronics, life science, medical technology, traffic, and security industries. It is listed on the Frankfurt Stock Exchange and currently has a market cap of €1.2 billion.
Insider buying at Jenoptik
Our data shows that on September 12, Chairman of the Executive Board and CEO Stefan Traeger purchased 4,365 JEN shares at a price of €23.32 per share. This trade cost the insider approximately €102,000.
This is not the only large stock purchase Dr. Traeger has made recently. We can see from our records that the insider also bought 15,000 shares at a price of €24.41 per share on August 11. So, in total, he has invested around €470,000 in stock over the last few months. This suggests he is very confident the stock is set to move higher.
It’s worth noting that insider purchases at Jenoptik are not very common. Our data shows that Dr. Traeger’s purchase in August represented the first buy from an insider since June 2016. The fact that the Chairman and CEO has suddenly stepped up to buy a significant amount of stock now is noteworthy, in our view.
2022 guidance raised
Jenoptik recently posted strong Q2 results and raised its guidance.
For the period, revenue came in at €238.7 million, up 34% year on year. Meanwhile, EBITDA amounted to €48.6 million, down just 3% year on year. Free cash flow for the quarter was €15.7 million, up from €2.4 million a year earlier.
At the end of the period, the order backlog stood at €710.5 million, up from €543.5 million at the end of 2021.
On the back of these results, the group raised its guidance for fiscal year 2022. It now expects revenue of between €930 and €960 million, versus previous guidance of at least €901 million. It also expects EBITDA to “increase significantly” compared to the prior year.
“Jenoptik continues to perform very well in an overall challenging environment. In the second quarter, we posted not only appreciable improvements in revenue and profitability, but also a very strong order intake and backlog. This gives us confidence for the second half of the year, and we’ve therefore raised our full-year targets for 2022 to a revenue range of between 930 and 960 million euros and an EBITDA margin of 18.0 to 18.5 percent,” commented Dr. Traeger.
In light of these results, and the increase to guidance, we see the insider buying here as a bullish indicator.