C-suite executives tend to have a good 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 some C-suite insider buying at CANCOM SE (COK:GR). CANCOM is a German provider of IT infrastructure and services that specializes in cloud transformation. It is listed on Deutsche Börse’s Xetra and currently has a market capitalization of around 995.07 million.
CEO and CFO Purchases
Our data shows that since the start of May, both CEO Rudiger Rath and CFO Thomas Stark have purchased CANCOM stock. Mr. Stark has made three purchases, acquiring a total of 7,354 shares, while Mr. Rath has made one purchase, picking up 1,800 shares.
It’s the three purchases from CFO Thomas Stark that stand out here. Mr. Stark joined CANCOM group back in the year 2000 and has served as CFO since 2014. So, he is likely to know the company very well and have an excellent understanding of business trends. The fact that he has bought stock three times in the space of around two months suggests that he believes the market is mispricing the stock.
CANCOM continues to generate solid growth.
For the first quarter of 2023, for example, revenue was up 7.1% year on year to €317.7 million while gross profit came in at €117.0 million versus €107.0 million a year earlier.
Looking ahead, growth should be boosted further by the recent acquisition of KBC Beteiligungs GmbH, the parent company of K-Businesscom AG. K-Businesscom AG is Austria’s leading ICT solutions and service provider with revenue of around €520 million in the 2022/2023 financial year.
It’s worth noting that CANCOM’s profits have been hit by rising costs recently. However, the decline in earnings here could be offset by a share buyback. In June, the company advised that it plans to buy back up to 10% of the current share capital between July 3, 2023 and June 30, 2024. This should support earnings.
In light of the solid growth being generated and the large share buyback, we see the insider buying as a bullish development.