12-month performance: -12% Insider activity: Bullish Insider buying pattern: Purchases from CEO Recent news: Good Q2 results
A CEO has deeper insight into their own company’s operations than any outside analyst could ever hope to obtain. So, if a CEO is buying company stock, investors should take note.
Today, we are going to highlight some recent CEO purchases at Vonage Holdings Corp (VG:US). Vonage Holdings is a US-based provider of cloud communication services to businesses and consumers. The company is listed on the NASDAQ Global Select Market and currently has a market capitalization of $2.7 billion.
Form 4 SEC filings show that Vonage’s CEO Rory Read has recently purchased VG stock twice. On 14 August, the CEO purchased 16,935 shares at a price of $11.83 per share. Then, on 26 August, the insider acquired another 17,870 shares at a price of $11.29. Overall, Read spent just over $400,000 on Vonage stock in August.
Source: 2iQ Research
These CEO purchases look interesting for a couple of reasons. Firstly, they represent the first insider buys at Vonage Holdings in over two years. Secondly, Read – who joined as CEO in July – has more than three decades of global technology industry experience. Previously, he was Chief Operating Executive at Dell Technologies. It’s likely that he has a good understanding of Vonage’s growth potential.
Increased revenue guidance
Vonage Holdings issued a solid set of second-quarter results in August. For the quarter, business service revenues increased 18%. Meanwhile, API Platform revenues increased 18%. “We executed well in the second quarter and delivered strong financial results,” said Read. Meanwhile, the company increased its revenue guidance for 2020.
Given the company’s momentum, we see the recent insider buying here as a bullish signal.
Disclaimer: Neither 2iQ Research GmbH nor its content providers are responsible for any damages or losses arising from any use of this information.
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