Top-level corporate insiders such as CEOs and CFOs tend to have the most up-to-date information on their businesses. If they’re buying company shares, it’s often a sign that the outlook for the stock is attractive.
In this report, we are going to highlight trading activity from top-level insiders at PUMA SE (PUM:GR). PUMA is a leading sportswear company. The third-largest sportswear manufacturer in the world, it distributes its products in more than 120 countries. The company is listed on Deutsche Börse’s Xetra and currently has a market cap of around €7.08 billion.
Insider Buying at PUMA
2iQ data shows that on May 19, both PUMA’s CEO and CFO bought stock. CEO Arne Freundt purchased 5,000 shares at a price of €47.70 per share while CFO Hubert Hinterseher purchased 2,200 shares at a price of €46.82 per share. Combined, the insiders spent €341,504 on PUMA stock.
Both of these insiders are likely to have an in-depth understanding of PUMA’s operations and prospects.
Mr. Freundt has worked for PUMA for more than 10 years and has been a member of the Management Board as Chief Commercial Officer since June 2021. He was appointed CEO last year.
Meanwhile, Mr. Hinterseher has been at PUMA for over 15 years now. Before being appointed CFO, he was Global Director of Financial Controlling.
We think the fact that the two insiders are buying stock at the same time is notable.
30% Share Price Upside?
PUMA recently posted solid results for the first quarter of 2023.
For the period, sales were up 14.4% year on year to €2.2 billion. Net income came in at €117 million versus €121 million a year earlier.
Looking ahead, management said that it is only expecting low- to mid-single-digit sales growth in Q2 due to high inventory levels and continued headwinds in the market.
However, for the full year, it expects high-single-digit sales growth and EBIT of €590 to €670 million.
“With our continued momentum we are fully on track to normalize our inventory levels and to achieve our full-year guidance,” commented Mr. Freundt.
Since the results, Baader Helvea has upped the stock to ‘buy’ from ‘add’, as it expects sales growth to pick up later in the year.
“We project that Puma will be able to outperform the overall sports market," the broker said in a research note.
Baader currently has a price target of €60 – about 30% above the current share price.
In light of these developments, we see the insider buying here as bullish development.