12-month performance: +108% Insider activity: Bullish Buying pattern: Large private placement purchases from CEO and Chairman Recent news: Signed a number of major deals
Neptune Wellness Solutions is a Canadian cannabinoids extraction company. The group specialises in the extraction, purification, and formulation of cannabis products and also provides customised turnkey solutions and specialty ingredients for the nutrition industry. The stock is listed on the Toronto Stock Exchange and currently has a market capitalisation of CAD $712 million.
Neptune shares have had a good run in 2019, rising around 120%. While recent Q4 results showed that the company is still loss-making, the company has made progress in a number of areas this year. For example, in June, the group signed a multi-year extraction agreement with cannabis company Tilray, while also signing a deal to provide extraction, formulation and packaging services to Green Organic Dutchman Holdings. Brokerage GMP Securities believes that Neptune is well positioned to be a leader in the North American cannabis industry.
Source: 2iQ Research
Neptune recently completed a USD $41 million private placement to help fund its acquisition of SugarLeaf and what we think is interesting is that there was significant participation by Neptune’s directors and management. In the private placement, CEO and President Michael Cammarata and Chairman John Moretz purchased USD $5 million worth of shares between them, while Chief Strategy Officer Martin Landry and Director Richard Schottenfield together bought nearly USD $1 million worth of shares. These purchases suggest to us that insiders are clearly confident in relation to the outlook for Neptune Wellness Solutions. With that in mind, we think NEPT shares have the potential to keep rising.
Air Products & Chemicals Inc (APD: US)
12-month performance: +43% Insider activity: Bullish Buying pattern: Large purchase from CEO Recent news: Very strong Q4 results
Air Products & Chemicals is an industrial gases company. The company provides atmospheric and process gases to manufacturing markets, including the refining and petrochemical, metals, electronics, and food and beverage markets, and it is also a leading supplier of liquefied natural gas process technology and equipment. The stock is listed on the New York Stock Exchange and currently has a market capitalisation of $51 billion.
APD shares have outperformed in 2019, rising approximately 45%. The stock got off to a good start to the year when the group reported strong first-quarter results in January and since then it has continued to climb higher, boosted by further strong results, a number of contract wins, and multiple broker price target upgrades.
Source: 2iQ Research
What’s interesting about Air Products & Chemicals is that despite the fact the shares have risen significantly this year, Chairman, President, and CEO of the company Seifi Ghasemi bought an additional 20,000 shares last week at a share price of $227.16, spending a total of $4.5 million. We see this buying activity as bullish, as it suggests that the insider – who is likely to have an excellent understanding of the company’s future prospects – clearly expects the shares to continue rising. With the group recently describing its Q3 results as “very strong” and the Chairman, President, and CEO of the company buying a large number of shares, we think the outlook for APD shares is favourable.
JD Sports Fashion (JD/: LN)
12-month performance: +39% Insider activity: Bullish Buying pattern: Purchase from Chairman Recent news: Added to the FTSE 100 index
JD Sports Fashion is a sportswear retailer that specialises in premium sports footwear and athleisure wear. Established in 1981 in Bury, UK, the company now has over 900 stores across the UK, the US and Asia. The stock is listed on the London Stock Exchange and currently has a market capitalisation of £6.2 billion.
While many UK retailers have struggled in recent years, JD Sports Fashion has gone from strength to strength. Sales have risen substantially due to strong demand for athleisure wear and premium sports footwear, while the company’s international growth strategy has also boosted the group’s top line. Year to date, the shares are up approximately 85%.
Source: 2iQ Research
While JD Sports Fashion shares have had a good run this year, we believe there could be more gains to come. We say this because last week Executive Chairman Peter Cowgill added another 15,000 shares to his personal holding, spending a total of £91,950 on stock – which we see as a bullish signal. Not only has Cowgill been Chairman of JD since 2004 – meaning that he is likely to have a very good understanding of the company – but he also has a good track record of timing his purchases well, with a 2iQ long-term trading IQ of 113. The fact that he purchased his shares at a price of £6.13 suggests that he continues to see value in the stock even after its strong year-to-date performance. With the group recently advising that it is on track to meet profit forecasts, and the Chairman buying shares at higher prices, we think JD has the potential to deliver further outperformance.
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