2iQ Insider Brief: Nordic Semiconductor (NOD: NO) Bonava AB (BONAVB: SS) EssilorLuxottica SA (EL: FP)

Kaloyan Kolev 28 October 2019

Nordic Semiconductor (NOD: NO)

 12-month performance: +59%
Insider activity: Bullish
Buying pattern: Purchases from multiple directors at higher prices
Recent news: Solid Q3 results

 

 Nordic Semiconductor is a Norwegian technology company that is engaged in the development and sale of integrated circuits and related solutions for short-range wireless communication. Its solutions are used in a range of end products, including computer and tablet accessories, mobile and wearable devices, home electronic devices, sports and health monitors, and installed sensor networks. The stock is listed on the Oslo Stock Exchange and currently has a market capitalisation of NOK 9.4 billion.

We last covered Nordic Semiconductor in mid-July when the stock was trading at NOK 41. At the time, the company had just issued a solid set of second-quarter results, and we noticed that Chairman Birger Steen had picked up another 25,000 shares, boosting his holding by nearly 20%. We interpreted this as a bullish signal and said that the stock had the potential to keep rising. Since our last report, the stock has risen to NOK 55, which represents a gain of over 30% in just over three months.

NOD_NO2Source: 2iQ Research

Analysing insider transaction activity here, we believe the stock has the potential to keep rising. We say this because in the last week three directors have purchased shares at higher prices, including the Chairman who has added another 16,000 shares to his holding. This suggests that these insiders are confident about the future and continue to see value at current levels. With the group recently stating that it has a record backlog of orders, and multiple insiders buying, we think the upward trend has further to run. 

 

Bonava AB (BONAVB: SS) 

12-month performance: -6.5%
Insider activity: Bullish
Buying pattern: Purchases from multiple directors
Recent news: Poor Q3 results

 

 Bonava is a Swedish real estate company that focuses on residential development. Operating in Sweden, Germany, Finland, Denmark, Norway, St. Petersburg, Estonia, and Latvia, the company specialises in developing affordable single-family and multi-family housing. The stock is listed on the OMX Nordic Exchange Stockholm and currently has a market capitalisation of SEK 10.3 billion.

 

Bonava shares have fallen from SEK 115 to SEK 101 recently on the back of the group’s third-quarter results. While sales for the quarter were roughly in line with sales for the comparable period last year, profit after tax for the period fell sharply after the company paid SEK 100 million to settle a legal dispute from 2008 when the group was still carrying out construction operations.

BONAVB_SSSource: 2iQ Research

Looking at insider transaction activity, we think the recent share price dip has created a buying opportunity. We say this because since the group’s third-quarter results three directors have purchased shares including CEO Joachim Hallengren and Chairman Carl Engstroem. This suggests that these insiders – who are likely to have a good understanding of the company’s future prospects – expect the shares to rebound. With the company recently stating that it looks to the future with confidence, and multiple insiders buying shares, we think the stock offers a favourable risk/reward proposition right now. 

EssilorLuxottica SA (EL: FP) 

12-month performance: +12%
Insider activity: Bullish
Buying pattern: Large purchases from Executive Chairman
Recent news: Capital Markets Day

 EssilorLuxottica is a leading multinational ophthalmic company. The company designs, manufactures, and markets a wide range of lenses, frames and sunglasses to improve and protect eyesight, and also owns a world-class portfolio of brands, including Ray-Ban, Oakley, and Persol. The stock is listed on the Euronext - Paris and currently has a market capitalisation of €58.5 billion.

 

We last covered EssilorLuxottica on 12 September when the stock was trading at €129. At the time, US activist fund Third Point had just taken a stake in the company and we noticed that billionaire Executive Chairman Leonardo Del Vecchio had been buying a substantial amount of stock, spending around €175 million on shares in the space of just six weeks. We saw this as a bullish signal. Since our last report, EssilorLuxottica’s share price has climbed to €134.

EL_FP2Source: 2iQ Research

Looking at insider transaction activity, we think it’s interesting that Executive Chairman Del Vecchio – who owns around one third of the company – has continued to aggressively buy shares recently. According to our records, the insider spent another €35 million on shares between 3 October and 10 October, which takes his total purchases since the beginning of August to approximately €210 million. Given the sheer scale of this buying activity, we think the outlook for the stock remains favourable.

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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