In this monthly series, we provide a roundup of insiders who have recently raised their stock holdings by a considerable percentage.
888 Holdings, Verano Holdings Corp, and ON Semiconductor Corp were all featured in our September 21 edition.
Why Should You Track Insider Holding Percentages?
There are multiple facets of insider trading behavior that can be immensely valuable for potential investors to track, such as analyzing how much an insider’s holding increases with a trade.
As an example, three insiders bought shares as part of a cluster and each spent £100,000, with two increasing their holdings by 30% and the third increased theirs by 70%. The 70% increase would be normally considered as more bullish.
The three examples below show notable increases in insider holdings and are bullish examples of insider trading.
ASOS PLC (ASC:LN)
ASOS is an online fashion retailer operating across the UK, US, Europe, and Australia. The company is listed on the Alternative Investment Market (AIM) of the London Stock Exchange, with a market capitalization of £2.3 billion.
Non-Executive Director and soon-to-be Chairman Ian Dyson purchased 4,500 ASC shares at a price of £23.17 per share. In total, this purchase cost the insider £104,265.
This trade illustrated Dyson’s strong confidence in ASOS after a 13% dip in share price after ASOS unveiled its full year results. This is evidenced by the fact that this increased his share count to 9,205 ASC shares, a 96% increase in his holding.
Dyson’s activity is interesting considering ASOS’s full-year results, which featured several negative indicators stemming from supply chain issues that could continue to impact the company’s current financial year.
Despite this, revenue was up 22% with a total customer increase of 13%. The company continues to be optimistic about their prospects, and for that reason we see Dyson’s buying as bullish.
Mondi PLC (MNDI:LN)
Over in the UK for this insider purchase. Mondi, a sustainable packaging and paper company, is a major producer of virgin containerboard and paper bags in Europe. In October 2021, a top-level insider made some notable transactions.
Phillip Yea, Mondi’s Chairman, bought 5,000 MNDI shares at £17.73 per share. This cost Yea £88,650, which increased his holding to 25,000 shares.
This trade saw the Chairman raise his stake in the company by 25%. Yea has a strong finance background, having held top-level positions at 3i, a UK private equity group, and Investcorp, an alternative investment product provider.
Taking into account Yea’s experience, as well as Mondi’s strong performance in 2021, we consider his holdings increase here to be bullish.
Polar Capital Holdings PLC (POLR:LN)
Polar Capital is a 20-year-old UK based boutique investment management company. The company is listed on the AIM of the London Stock Exchange, with a current market capitalization of £774 million.
In October 2021 we reported on a significant trade by Non-Executive Director Andrew Ross. On October 14, 2021, he purchased 15,000 shares at £7.71 per share. This cost £115,650.
Ross’ investment massively increased his holding with Polar Capital by 60%, raising his stake to 40,000 shares. The boost to his holdings suggests he’s very confident POLR stock is set to rise.
The insider has access to intelligence on Polar’s prospects, as well as an extensive 20-year career in investment and wealth management. Coupling this with the solid company growth in 2021 we documented in our full report, we consider this holding increase to be a bullish signal.
If you want to read more about October 2021’s significant holding increases, check these blogs:
Follow the 2iQ blog for future round-ups too.