12-month performance: +5% Insider activity: Bullish Buying pattern: Buying from multiple insiders including President/CEO Recent news: Good Q4 results
Essity Aktiebolag is a global hygiene and health company that is headquartered in Stockholm, Sweden. The group’s products, which are sold in around 150 countries worldwide, include tissue paper, baby care, feminine care, incontinence products, and wound care. The company is listed on the Stockholm Stock Exchange and currently has a market capitalisation of SEK 197 billion.
Essity looks fairly well placed in the wake of the coronavirus. Not only should the group see an increased demandfor its toilet paper products, but it should also enjoy higher demand for its cleaning products such as soap, sanitisers, and wipes. Interestingly, analysts at JP Morgan recently upgraded the stock to ‘overweight’ from ‘neutral’, stating that the company is well positioned to benefit from the widespread implications of COVID-19 given its product mix.
Source: 2iQ Research
What stands out about Essity to us is that three insiders, including President/CEO Magnus Groth and President of Global Operations Services Robert Sjoestroem, have purchased ESSITYB shares in the last week. We see this buying activity as a bullish signal, as these insiders are likely to have a good understanding of the company’s near-term prospects in this difficult period. With the stock currently down more than 12% from its February high, we think the risk/reward proposition here is favourable at present.
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