2iQ Insider Brief: ASOS PLC (ASC: LN) Samhallsbyggnadsbolaget I Norden AB (SBBB: SS) BillerudKorsnas AB (BILL: SS)

Kaloyan Kolev 26 July 2019

ASOS PLC (ASC: LN) 

12-month performance: -64%
Insider activity: Bullish
Buying pattern: Purchases from CEO and Chairman
Recent news: Profit warning

 

ASOS is an online fashion retailer. Headquartered in the UK, the company operates country-specific websites in the UK, US, Australia, Germany, Spain, France, and Italy and sells over 85,000 branded and own-label products. The stock is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and currently has a market capitalisation of £1.9 billion.

ASOS shares fell 23% last Thursday after the group’s quarterly trading update included a profit warning. Revising its guidance for FY2019, the online retailer reduced its pre-tax profit forecast to £30-£35 million, down from its previous estimate of £55 million. However, the company advised that the profit warning was due to operational issues associated with its warehouse transformation programme and that it was expecting to have these issues resolved by September.

ASC_LNSource: 2iQ Research

Looking at insider transaction activity in the wake of the trading update, we think investors may have overreacted to the news. We say this because late last week, both Chairman Adam Crozier and CEO Nicholas Beighton purchased shares in the company, which suggests that both insiders are confident about the future and expect the share price to recover. With ASOS’ problems appearing to be short-term in nature and two top-level directors taking advantage of the share price fall, we think ASOS shares have rebound potential.

 

Samhallsbyggnadsbolaget I Norden AB (SBBB: SS) 

12-month performance: +64%
Insider activity: Bullish
Buying pattern: Buying from multiple directors including Chairman and Deputy CEO
Recent news: Strong Q2 results

 

Samhällsbyggnadsbolaget, or SBB for short, is a Swedish property company. Founded in 2016, the company focuses on rental residential property in Sweden as well as social infrastructure properties and building rights in the Nordic region. The stock is listed on the OMX Nordic Exchange Stockholm and currently has a market capitalisation of SEK 13.2 billion.

 

We last covered SBB in mid-May. At the time, we noticed that a number of top-level directors had purchased shares in the company after strong Q1 results, and we stated that, in our view, the stock had “the potential to keep rising.” Since then, SBB shares have risen 25%, boosted by strong Q2 results, which is an excellent result as Sweden’s main stock index the OMX Stockholm 30 index has risen only 2% in that time.

SBBB_SSSource: 2iQ Research

What’s interesting here is that despite the fact SBBB shares have surged over the last two months, insiders continue to buy. So far in July, we have observed purchases from three separate directors including Chairman Lennart Schuss, who purchased around USD $170,000 worth of shares on 23 July, and Deputy CEO Lars Thagesson who purchased approximately USD $166,000 worth of shares between 19-23 July. Both of these insiders bought shares near the SEK 16 mark, which suggests they believe the shares offer value at current levels. With that in mind, we think the current uptrend could have further to run.

 

BillerudKorsnas AB (BILL: SS)

 12-month performance: +15%
Insider activity: Bullish
Buying pattern: Buying from multiple directors including CEO and CFO
Recent news: Mixed interim results

 

BillerudKorsnas is a leading provider of sustainable packaging solutions that is based in Sweden. The group’s packaging solutions are used in a wide range of industries including the food and beverage, luxury goods, and healthcare industries. The stock is listed on the OMX Nordic Exchange Stockholm and currently has a market capitalisation of SEK 23.8 billion.

 

BillerudKorsnas shares fell sharply early last week after the group reported its interim results. While performance in the second quarter of the year was generally solid, with net sales rising 7%, investors were spooked by the news that the company was expecting increased price pressure in Q3 and weaker market conditions in “some segments.” The shares have recovered slightly this week after packaging peers Mondi and UPM-Kymmene released positive updates.

BILL_SSSource: 2iQ Research

Looking at insider transaction activity at BillerudKorsnas, we believe last week’s pullback may have created an attractive entry point. We say this because after the interim results four top-tier directors purchased shares in the company, including the CEO, CFO, and CTO. These insiders are likely to have an excellent understanding of the group’s future prospects, so we interpret this buying activity as bullish. With BillerudKorsnas well placed to benefit from increasing demand for renewable packaging in the years ahead, and multiple directors buying shares, we think the outlook for the stock is favourable.

Disclaimer: Neither 2iQ Research GmbH nor its content providers are responsible for any damages or losses arising from any use of this information.

Getting the most of Insider Trading Data - Free Book

Download
ebook-sample