Cluster buying, which is purchases made by three or more insiders in the same stock within a short period of time, is generally seen as a bullish signal. Each month our analysts scour the markets to share interesting examples of corporate insider cluster buying.
These comprehensive cluster buying reports include information about the insiders who made the purchases, their investing history, their relationship with the company, and other key details to help with investor decision-making.
This month’s report examines two businesses that experienced significant insider buying clusters in July 2021.
Volvo AB (VOLVB:SS)
Volvo AB is the parent company of Volvo Group, which operates as a commercial vehicle manufacturer. The company is listed on the OMX Nordic Exchange Stockholm and currently has a market capitalization of SEK 428 billion.
In terms of cluster buying, it is worth highlighting that between 20 July and 21 July 2021, 2iQ’s report shows that four members of Volvo’s Executive Board purchased VOLVB stock.
- Jan Ytterberg, Executive Vice President Volvo Group and CFO who bought 2,750 shares @ SEK 194.02 per share.
- Joachim Rosenberg, Executive Vice President Volvo Group and President Volvo Energy who bought 11,500 shares @ SEK 195.87 per share.
- Melker Jernberg, Executive Vice President Volvo Group and President Volvo Construction Equipment who bought 5,000 shares @ SEK 193.61 per share.
- Roger Alm, Executive Vice President Volvo Group and President Volvo Trucks who bought 5,200 shares @ SEK 193.91 per share.
Additionally, the largest purchase came from Industrivarden, Volvo’s main shareholder, which bought 3 million shares at a price of SEK 204.55 per share, spending SEK 614 million (approx. $71 million) on stock
These cluster purchases are notable for two reasons:
- All of the insider purchases are sizable, with the largest being from Volvo’s main shareholder. This level of investment shows confidence in the business, and perhaps the belief that the stock is currently undervalued.
- Buyers are all top-level insiders. This indicates that their decisions are informed by strong knowledge of the company’s performance and that they are looking towards a successful future.
Cluster buying from insiders of this calibre is a bullish signal of a positive trajectory for the company.
Humble Group AB (HUMBLE:SS)
Humble Group is a fast-moving consumer goods (FMCG) company in the health and wellness sector. The group is made up of 13 companies that specialize in everything from sugar reduction and functional food to long-term beauty and wellness.
Since late June 2021, there was notable insider transactions and cluster buying from insiders:
- COO Noel Abdayem (672,855 shares)
- Deputy CEO Simon Petren (6,250 shares)
- CFO Johan Lennartsson (1,000 shares)
Abdayem has amassed a sizable investment in Humble stock, which was purchased for around SEK 13.3 million (USD $1.5 million). This implies that he is highly confident in the stock's upward trajectory.
It's worth mentioning that Abdayem isn't a frequent stock buyer but is a top-level insider, as he is Humble Group’s largest shareholder and founder of Humble Co AB, part of the larger group.
CEO Simon Petren said:
“Although 2020 was an exciting year where we went from being a small company to becoming an established player, I dare say that in 2021 we will start to take the really big steps and make a real difference in the industry.”
We consider this cluster to be a bullish indicator.
Read more cluster buying reports on the 2iQ blog.