Insider transactions can offer investors a wealth of information. Corporate insiders are among the most well-informed market participants, and studies have shown that their trading activity is a good predictor of future stock performance.
In this article, we’ll look at the stocks that experienced the most insider buying in the first quarter of 2021. Over the course of the time, all of these equities saw insider purchases of at least $15 million.
These companies are certainly worth a closer look right now, given the strong degree of buying activity.
Sandvik AB (SAND:SS)
The total cost of the shares purchased was €88 million.
Johan Molin (Chairman), Claes Boustedt (Director), Industrivärden (10 percent owner), and L E Lundbergforetagen were among those who purchased shares (investment company represented on board)
Sandvik is a Swedish engineering firm that specializes in mining and rock excavation, as well as metal cutting and materials technologies. It has a market capitalization of SEK 296 billion and is traded on the Stockholm Stock Exchange.
Sandvik appears to be well positioned to gain from the global economic recovery. It recently stated that demand for its long-cycle mining operations is high.
It also stated that the rate of recovery seen at the start of October remained consistent throughout the fourth quarter.
Recent insider buying appears to be quite positive in this market. On the 4th of March, the Chairman made a substantial purchase that appears to be extremely interesting. This purchase increased the amount of his holdings by a factor of two.
KONE Oyj (KNEBV:FH)
KONE Oyj is a company based in Oyj, Finland (KNEBV:FH)
The total cost of the shares purchased was €72.6 million.
Antti Herlin was the one who bought the stock (Chairman)
In the elevator and escalator industries, KONE is a global leader. The company has a market valuation of €31.8 billion and is listed on the OMX Nordic Exchange Helsinki.
In February, KONE released their full-year 2020 results. Adjusted EBIT increased by 4% to €381 million for the year, beating analyst expectations by 3%. The group proposed an extraordinary dividend of €0.50 per share as a result of this performance. This large dividend indicates that management is optimistic about the future.
Chairman Antti Herlin, the company’s biggest shareholder, spent approximately €70 million on stock in the first quarter. This insider buying activity is optimistic in our opinion.
Bouygues SA (EN:FP)
The total cost of the shares purchased was €55 million.
SCDM SAS was the buyer of shares (family holding company)
Bouygues is a construction, media, and telecommunications corporation based in France. The company operates in more than 90 countries and employs more than 130,000 people worldwide.
It has a market capitalization of €13.1 billion and is traded on the Euronext Paris stock exchange.
Bouygues just released their full-year 2020 results, stating that H2 saw a “rapid turnaround” after H1 was significantly hit by the epidemic. It also predicted that sales and profitability in 2021 will be “much higher” than in 2020.
The group declared a dividend of €1.70 per share, showing its confidence in its future.
This is a stock we discussed in July of last year. SCDM SAS had just spent €34.5 million on the shares at the time. This was interpreted as a bullish indicator by us. Since then, the stock has risen slightly, but not much.
Nonetheless, we consider the most recent insider purchases to be optimistic.
LVMH Moet Hennessy Louis Vuitton SE (LVMH:FP)
Purchased shares were worth €52.0 million.
Bernard Arnault was the one who bought the stock (Chairman)
LVMH is a luxury goods conglomerate based in France that controls some 70 brands in the fashion, perfume and cosmetics, watches and jewelry, and alcoholic beverage industries. The stock has a market valuation of €299 billion and is traded on the Euronext Paris stock exchange.
LVMH shares recently hit new highs after the company reported robust first-quarter sales. Like-for-like sales increased by 30% year over year to €14 billion in the third quarter. A number of brokers have recently boosted their price predictions in this market.
For example, Cowen and Company boosted their price estimate from €610 to €640.
Chairman Bernard Arnault made a number of significant purchases in the first quarter. These were well timed. The insider has already made a tidy profit.
Landos Biopharma Inc (LABP:US)
The total cost of the shares purchased was €29.9 million.
Konstantin Poukalov (Director), Perceptive Advisors LLC (10 percent owner), and RTW Investments LP were among those who purchased shares (investment company represented on board)
Landos Biopharma is a clinical-stage biopharmaceutical business specializing in the discovery and development of oral medicines for autoimmune disease patients. It has a market capitalization of $422 million and is traded on the NASDAQ Global Market.
Landos Biopharma launched its initial public offering (IPO) in February of this year (IPO). Since then, the stock has underperformed, falling from a high of $16 during the IPO to a low of roughly $10 today.
What’s more fascinating is that Perceptive Advisors LLC and RTW Investments LP, two of the company’s three largest shareholders, have increased their shares by taking advantage of the current share price slump. This indicates that they believe the stock will recover.
Ironwood Pharmaceuticals Inc (IRWD:US)
The total cost of the shares purchased was €19.0 million.
Edward Owens (10%) and Sarissa Capital Management LP (10%) bought shares (Director)
Ironwood Pharmaceuticals is a pharmaceutical business specializing in the research and marketing of gastrointestinal (GI) medications. Its main product is linaclotide, an IBS medication marketed in the United States and Mexico as LINZESS and in Canada and Europe as CONSTELLA. The company has a market capitalization of $1.7 billion and is traded on the NASDAQ Global Select Market.
In the year 2020, Ironwood performed admirably. Adjusted EBITDA increased by 9% during the period, while non-GAAP net income increased by 49%. Looking ahead, the business expressed confidence in its future prospects, saying it has a “tremendous chance” to optimize LINZESS through creative commercial initiatives.
Sarissa Capital Management, Ironwood’s fourth-largest stakeholder, spent roughly $23 million on stock between February 26 and March 10. This indicates that the investment manager believes the stock has room to rise.
The bottom line is that insider monitoring is difficult, and it is far from a surefire way to make a lot of money. A pattern of trades could indicate forthcoming market shifts, and it’s always comforting to purchase or sell a stock knowing that an insider is doing the same. Insider advice, on the other hand, will never be a substitute for thorough research.