Insiders have access to real-time information on their companies and often also have a wealth of experience and knowledge to help them evaluate their firms’ prospects. If they are buying company stock, it’s generally worth taking a closer look.
Here, we are going to look at insider buying at Watches of Switzerland Group (WOSG:LN). Watches of Switzerland is a luxury watch and jewelry retailer. The company, which sells brands such as Rolex, Omega, and Tag Heuer, has 16 showrooms in the UK and has seven showrooms in the US where it has a growing presence. It also has an online offering. It’s traded on the London Stock Exchange and currently has a market capitalization of £2.09 billion.
Watches of Switzerland Group: Insider Buying
Our insider transaction data shows on July 11, the Chairman of Watches of Switzerland, Ian Carter, purchased 26,000 WOSG shares at a price of £7.62 per share. This purchase cost the insider around £200,000 (approx. $235,000) and increased his holding in the company by about 60%.
Large Increase in Holding
The insider trading at Watches of Switzerland caught our attention for two main reasons.
Firstly, Mr. Carter has increased the size of his holding significantly with this trade. This suggests that he is very confident the stock – which has had a big pullback in 2022 – offers value at current levels.
Secondly, Mr. Carter has over 30 years of retail experience so is likely to be very familiar with the luxury sector. He spent close to 15 years at Hilton Worldwide and was CEO of Hilton International in London. For 12 years he was a Non-Executive Director at Burberry Group PLC.
Watches of Switzerland had a very strong FY2022, generating record revenues and profits.
Group revenue for 2022 of £1.24 billion was 37% higher than the year before and adjusted EBITDA of £162 million was 54% higher than 2021. Net debt reduced by £30 million to £14 million.
Looking ahead, management was confident about the future. “We enter FY23 with strong momentum with consumer demand continuing to outpace supply, and within this environment, we are benefitting from our strength both in showrooms and online. Watches of Switzerland is uniquely positioned within a large and growing market, and we look to the future with confidence as we focus on capitalizing on the considerable sustainable growth opportunities available to us,” said Brian Duffy, Chief Executive Officer.
However, this year, the company’s share price has taken a big hit on the back of fears over a squeeze on disposable income. Year to date, the stock is down about 40%.
The buying from Mr. Carter here suggests that he expects the stock to bounce back. We see this insider buying activity as a bullish indicator.