12-month performance: +7% Insider activity: Bullish Buying pattern: Purchases from multiple directors including CEO and Chairman Recent news: Mixed FY2019 results
Software AG is a German software developer and provider of technology platforms for businesses. The group works with companies across a variety of industries, including banking, energy, retail, and transportation, and specialises in digital transformation solutions. The company is listed on the XETRA and currently has a market capitalisation of €2.6 billion.
Software AG shares took a hit in late January on the back of a mixed set of full-year results. While revenue for the year was up 3%, EBIT fell 7% and earnings per share declined 4%. The company also advised that it would be increasing its strategic investments in FY2020 in order to accelerate its business transformation. The shares have since rebounded, however, after the group held its Capital Markets Day on 5 February.
Source: 2iQ Research
Looking at insider transaction activity, we think it’s interesting that four top-level directors – including CEO and Chairman of the Management Board Sanjay Brahmawar, Chairman of the Supervisory Board Andreas Bereczky, Chief Revenue Officer John Schweitzer, and Chief Product Officer Stefan Sigg – took advantage of recent share price weakness to buy Software stock. This indicates that these insiders are confident about the future and expect the stock to move higher. Given that all four of the aforementioned directors have significant experience in the technology industry, we see this buying activity as a bullish signal.
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