2iQ Insider Brief: Banco Santander SA (SAN: SM)Hugo Boss AG (BOSS: GR)Bravida Holding SA (BRAV: SS)

Kaloyan Kolev 8 November 2019

Banco Santander SA (SAN: SM)

 12-month performance: -10%
Insider activity: Bullish
Buying pattern: Large purchases from multiple directors
Recent news: Poor Q3 results

 

 

Banco Santander is a Spanish multinational retail and commercial bank. One of the largest banks in Europe, it currently employs over 200,000 staff and serves over 140 million customers. The stock is listed on the Madrid Stock Exchange and currently has a market capitalisation of €63.3 billion.

Banco Santander shares have come under pressure recently after the group reported a 75% drop in third-quarter profit due to one-off charges related to its UK business. The charges, which totalled more than €1.6 billion, were a result of increased provisions for payment protection insurance (PPI), goodwill write downs, and increased competition in the mortgage lending space.

SAN_SMSource: 2iQ Research

Looking at insider transaction activity, we think that Santander’s recent share price weakness has created a buying opportunity. We say this because since the group’s Q3 update the Botin family – which includes Santander Chair Ana Botin and non-executive director Javier Botin – has acquired 10 million shares for a total cost of more than €36 million, which suggests that the family is confident the bank can recover from recent setbacks. In addition to this, non-executive director Rodrigo Echenique Gordillo recently purchased 3,000 call options that expire in two years – another bullish signal. Given this bullish insider activity, we believe the stock offers a favourable risk/reward proposition right now.

 

Hugo Boss AG (BOSS: GR)

 12-month performance: -35%
Insider activity: Bullish
Buying pattern: Purchases from CEO and CFO
Recent news: Positive trading update

 

 

Hugo Boss is a German luxury fashion company. Offering a wide range of men’s and women’s apparel, evening wear, sportswear, shoes, and accessories, the group sells its products in over 125 countries. The stock is listed on the XETRA and currently has a market capitalisation of €2.8 billion.

 

Hugo Boss shares have underperformed in recent months after the company has lowered its 2019 earnings forecasts multiple times due to political unrest in Hong Kong and challenging conditions in the US. In August, the group advised that it was expecting full-year sales and earnings to come in at the lower end of its forecasts, while in October, it reduced its EBIT guidance to between €330 million and €340 million, down from €347 million. However, it looks like the outlook could be improving, as on 5 November the company said that it expects sales and operating profit to rise in the fourth quarter due to the success of recent fashion shows in Milan and Shanghai.

BOSS_GRSource: 2iQ Research

What we think is interesting here is that in the last week, both CEO Mark Langer and CFO Yves Mueller have purchased more Hugo Boss shares. On 6 November, Langer acquired 13,000 shares, spending around €505,000 on stock, while on 7 November Mueller, purchased 3,000 shares, spending approximately €117,000. We see this as a bullish signal, as these two insiders are likely to have a good understanding of the company’s future prospects. Given these purchases, we think Hugo Boss shares have rebound potential.

 

Bravida Holding SA (BRAV: SS)

 12-month performance: +16%
Insider activity: Bullish
Buying pattern: Purchases from multiple directors
Recent news: Solid Q3 results

 

 

Bravida Holding is a Swedish company that provides technical installation services across the Nordic region. And end-to-end services provider, the group offers a broad range of installation services including electricity, heating and cooling, and power supply installation. The stock is listed on the OMX Nordic Exchange Stockholm and currently has a market capitalisation of SEK 16 billion.

 

Bravida Holdings issued a solid set of third-quarter results on 6 November. For the quarter, net sales increased 5% to SEK 4,638 million, while EBITDA rose 3% to SEK 276 million. The group also advised that its Q3 backlog was 35% higher at SEK 14,507 million. However, on the downside, the company said that it faces restructuring costs of SEK 60 million in Q4 and this news saw the stock fall from SEK 90 to SEK 79.

BRAV_SSSource: 2iQ Research

Examining insider transaction activity, we believe Bravida’s share price pullback has created a buying opportunity. We say this because since the group’s Q3 update three directors have added to their personal holdings including the company’s CFO, its Chief Legal Officer, and the Chairman of its Audit Committee. With three insiders taking advantage of share price weakness to boost their personal holdings, we think there’s a good chance that the share price will recover and continue moving higher.

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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