The data from the 2iQ terminal can show a clear correlation between the size of a company and the profitability of insider transactions.
Several factors can cause this, and one of the more significant is the fact that smaller companies are often less visible, and therefore scrutinised less by market analysts.
Another compounding factor is when multiple insiders buy stock at similar times.
Play Magnus AS (PMGME:NO)
This report covers one of those small companies: Norwegian listed Play Magnus AS (PMGME:NO). Play Magnus is listed as a software company that develops commercial computer and mobile chess applications, and currently has a market cap of $123.8M.
A Note on the Founder of Play Magnus
It is worth noting that Magnus Carlsen is a Norwegian chess grandmaster who is the current World Chess Champion, World Rapid Chess Champion, and World Blitz Chess Champion.
He is the youngest player ever to be ranked number one and is said to have an IQ of 190. The exposure this gives the young champion, and his budding company, is huge, with the most recent e-tournament hosted by Play Magnus receiving over 7 million views.
If these numbers weren’t enough to get investors interested, the 1.5 billion views that the tournament’s related press and social media generated certainly should do.
Summary of Insider Buying: 9 Top-level Insiders, Including Carlsen Himself
2021 has been an extraordinarily busy year for insiders at Play Magnus, with almost $1 million spent so far by 9 different top-level insiders.
But the most recent of that activity was from founder Magnus Carlsen himself, buying 63,157 shares at the end of July 2021 at a cost of $139,683. Prior to that, over $480,000 had been spent between May and June 2021 at an average price of $2.28.
With the founder himself buying such sizable stock, this is an indication of his sustained belief in the company, and the bright future of chess.
The Rise of Chess Around the World Makes for an Investable and Profitable Market
This confidence in the company and insider purchasing of stocks can perhaps be partly attributed to the rise of chess around the world, which shows no signs of slowing down.
For a game that’s been around for over a thousand years, it may come as a surprise that chess has recently been launched into the spotlight like some big new craze. But this recent boom in the strategy-based board game has two very simple explanations.
The first is one that astute investors may have seen coming: the impact of COVID-19. With everyone at home and social activities restricted, the board games market as a whole rose almost 10% and $1bn during 2020, with the trend set to continue through 2021.
The second, however, no one could have seen coming. In October of 2020, a new Netflix series called The Queen’s Gambit hit screens, and made an immediate impact across the world. The show was an instant hit with an estimated 62 million households tuning in within its first month alone, making this the number 1 streamed show in 63 countries and the top 10 in 96 countries (Yahoo Movies).
In the US, sales of chess sets spiked 87% in the month following the show’s premiere, and book sales about the game rose 603% according to market research firm NPD Group.
With Google Trends highlighting 2,000% increases and above in searches for terms like ‘Chess’ ‘Queen’s Gambit’ and ‘Anya Taylor-Joy’ (the show’s lead actress), it’s safe to say that this trend isn’t going anywhere soon and the rise of chess participation and online viewership looks certain to continue for the foreseeable future.
More on Booming Industries and Insider Buying
To find out more about which industries are seeing a rise in success and interesting insider buying reports, head to the 2iQ blog.