2iQ Insider Brief: TUI AG(TUI1 GR) Bilfinger SE(GBF GR) RIB Software(RIB GR)

Kaloyan Kolev 19 February 2019

TUI AG (TUI1: GR) 

12-month performance: -45%
Insider activity: Bullish
Buying pattern: Purchases from multiple directors including CEO and Chairman of Supervisory Board
Recent news: Profit warning

 

TUI is a German tourism group that covers the entire tourism value chain. The company operates travel agencies, tour operators, airlines, hotels and resorts, and cruise liners. The stock is listed on the XETRA (as well as the London Stock Exchange) and currently has a market capitalisation of €5.7 billion. 

 

TUI shares have performed poorly over the last six months, losing over 40% of their value. Much of this share price weakness can be attributed to the hot weather across Northern Europe last summer, as this resulted in lower demand for holidays abroad, reducing profitability for many tourism companies. Recently, on 7 February, TUI shares had their worst day in nearly 10 years, after the group cut its profit outlook for the year ending 30 September.

 TUI AG

Source: 2iQ Research

Clearly, TUI shares are out of favour right now. Yet looking at recent insider transaction activity, we think the outlook for the group may not be as bad as some investors fear. We say this because, in the last week, a number of top-tier directors have been acquiring large quantities of TUI shares, which suggests they expect the shares to rebound. Those buying have included CEO Friedrich-Peter Joussen, who has purchased 200,000 shares in February, Chairman of the Supervisory Board Klaus Mangold, who has bought 30,000 shares, as well as several other members of the executive board. In our view, this is a bullish signal. As such, we think the stock has turnaround potential.

 

Bilfinger SE (GBF: GR) 

12-month performance: -14%
Insider activity: Bullish
Buying pattern: Purchases from multiple directors including CEO, CFO and COO
Recent news: Solid FY2018 results

 

Bilfinger is a German industrial services provider which specialises in providing customised engineering and services to customers in process industries such as chemicals, oil and gas, and pharmaceuticals. Its services cover the entire value chain including consulting, engineering, manufacturing, assembly, maintenance, and plant expansion. The stock is listed on the XETRA and currently has a market capitalisation of €1.4 billion.

 

Shares in Bilfinger experienced a 30% decline between mid-November and late December last year as global equity markets fell on the back of concerns over slowing global growth. However, it looks as though investors may have overreacted, as recent results for FY2018 were solid and met earnings expectations. The shares have already bounced nearly 25% year to date – could there be more upside to come? 

 BILFINGER SE

Source: 2iQ Research

Looking at insider transaction activity here, we think the outlook for Bilfinger shares is favourable at present. This is due to the fact that following the group’s recent FY2018 results, we observed purchases from the company’s CEO, CFO and COO. These purchases indicate that management believes the shares can climb higher from current levels. While the shares have performed well in 2019 so far, we think they have the potential to keep rising.

 

RIB Software (RIB: GR) 

12-month performance: -50%
Insider activity: Bullish
Buying pattern: Purchases from CEO and Deputy Chairman
Recent news: Strong results

 

RIB Software is a German technology company that focuses on the construction industry. Its main activities are the development and sale of software, as well as the provision of consulting services for construction projects. The stock is listed on the XETRA and currently has a market capitalisation of €660 million.

 

RIB Software shares have performed poorly over the last 12 months, falling nearly 30%. Yet looking at recent news from the company, there appears to be a disconnect between share price momentum and operational performance. For example, in October, the group increased its sales guidance for the 2018 year, while just last week, the company reported 68% growth in software and cloud revenues, and stated that it expects its fast revenue growth and high profitability to continue in 2019 and become “even stronger” in following years.

 RIB Software

Source: 2iQ Research

From an insider transaction perspective, we think RIB Software shares look very interesting right now. This is due to the fact that both CEO Thomas Wolf and Deputy Chairman of the Supervisory Board Matthias Rumpelhardt have taken the opportunity to buy several tranches of shares recently while the share price has been depressed, which suggests they believe the shares will rise from current levels. Furthermore, in October the group announced a share buyback – another sign that management believes the stock is undervalued. Given this bullish insider activity, we think the shares have upside potential.

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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