2iQ Insider Brief: Zooplus AG (ZO1: GR) Homology Medicines (FIXX: US)MBK PCL (MBK: TB)

Kaloyan Kolev 31 January 2020

Zooplus AG (ZO1: GR)

 12-month performance: -20%
Insider activity: Bullish
Buying pattern: Multiple purchases from CEO
Recent news: FY sales up 14%

 

 

Zooplus is a German pet supplies retailer that markets a vast selection of products through its online stores. Founded in 1999, the e-commerce company now ships to 30 countries across Europe and has 6.8 million active customers. The company is listed on the XETRA and currently has a market capitalisation of €593 million.

We have noted in the past that Zooplus CEO Cornelius Patt has a very good track record when it comes to the timing of his purchases and sales in the company. Over the last few years, Patt has managed to generate substantial profits from his trading activity in Zooplus by selling near the highs and then repurchasing stock at lower prices. His purchases in late April last year at €91 are a good example of his excellent timing – the stock rose from €91 to €125 in the next two months.

Zo1_GRSource: 2iQ Research

Recently, Zooplus shares have underperformed. In the last quarter of 2019, the stock fell from around €110 to €85 on the back of disappointing third-quarter results and the resignation of the company’s CFO. However, what’s interesting is that Patt has been buying again. Since early December, the insider has made six purchases, acquiring an additional 9,800 shares. We see this as a bullish signal. Given Patt’s track record, we believe there’s a good chance the stock will rebound in the near future.

 

Homology Medicines (FIXX: US)

 12-month performance: -21%
Insider activity: Bearish
Selling pattern: Large sales from private equity 10% owner
Recent news: Presented results of gene therapy study

 

 

Homology Medicines is a gene therapy company that is focused on curing rare genetic diseases. The group’s lead product candidate, HMI-102, is a gene therapy designed to treat phenylketonuria (PKU) – a rare but potentially serious inherited disorder which leads to intellectual disabilities. The company is listed on the NASDAQ Global Select Market and currently has a market capitalisation of $704 million.

FIXX_USSouce: 2iQ Research

Homology Medicines shares have underperformed over the last month, after the group released its initial data from an early-stage study of the effects of HMI-102 on a patient with PKU. The company said the treated patient showed reduced levels of PKU after four weeks of therapy with no side effects, however, it seems investors are unsure as to whether the improvement seen in the patient was statistically significant.

 

Looking at insider transaction activity, we think it’s concerning that private equity firm Deerfield Management – a major investor – has recently offloaded a large amount of stock. Since mid-December, the private equity firm has sold around $22 million worth of Homology shares, which we see as a bearish signal. It’s also worth pointing out that CFO Brad Smith owns no shares in the company. Records indicate that every time the insider is awarded stock, he sells immediately. All things considered, we think caution is warranted towards Homology Medicines stock right now.

 

MBK PCL (MBK: TB)

 12-month performance: -4%
Insider activity: Bullish
Buying pattern: Purchases from multiple directors including CEO
Recent news: Poor Q3 results

 

 

MBK is a Thai investment company. The group owns a wide variety of assets including shopping centres, hotels and resorts, golf clubs, and food businesses, and its goal is to generate sustainable growth for investors. The company is listed on the Stock Exchange of Thailand and currently has a market capitalisation of THB 33.6 billion.

 

MBK shares have underperformed since early November, falling from around THB 23 to THB 20. The stock has declined due to weak third-quarter results, which showed a 36% reduction in net profit for the first nine months of the year, as well as concern over the Coronavirus, which has dragged the entire Thailand stock market down significantly.

MBK_TBSource: 2iQ Research

Examining insider transaction activity, we think it’s interesting that a number of MBK directors have taken advantage of the recent share price weakness and purchased shares in the company. Since late December, we have observed a large number of purchases from four directors including CEO Suvait Theeravachirakul and Deputy Managing Director Somphol Tripopnart. This suggests that these insiders are confident about the future and expect the stock to rebound. With that in mind, we think MBK shares are worth a closer look right now.

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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