Yahoo Finance Why Did Quabit Inmobiliaria SA.’s’ (BME:QBT) Insiders Buy Up More Shares?
Quabit Inmobiliaria, S.A., a real estate company, engages in real estate development and land management activities in Spain. Quabit Inmobiliaria’s insiders have invested more than 5 million shares in the small-cap stocks within the past three months. It is widely considered that insider buying stock in their own companies is potentially a bullish signal. A research published in The MIT Press (1998) concluded that stocks following insider buying outperformed the market by 4.5%. However, it may not be sufficient to base your investment decision merely on these signals. I’ve analysed two possible reasons driving the insiders’ decision to ramp up their investment of late.
View our latest analysis for Quabit Inmobiliaria
Who Are The Insiders?
There were more Quabit Inmobiliaria insiders that have bought shares than those that have sold. In total, individual insiders own over 13 million shares in the business, which makes up around 9.11% of total shares outstanding. Insiders that have recently ramped up their holdings are: Alberto Pérez Lejonagoitia (board member) , Claudia Pickholz (board member) and Félix López (management and board member) .
Is This Consistent With Future Growth?
On the surface, analysts’ earnings growth projection of 75.65% over the next three years provides a strong outlook going forward which is consistent with the signal company insiders are sending with their net buying activity. Delving deeper into the line items,Quabit Inmobiliaria is believed to experience a large double-digit top-line growth over the next year, which has not been passed down into earnings expectations given its large negative growth. This illustrate high cost growth relative to incoming revenues, and could indicate a time of investment and growth in the company. This seems to be supported by insiders’ conviction evidenced by their net buying activities. Or else they may simply deem the company as undervalued by the market based on future growth it could produce.
Did Stock Price Volatility Instigate Buying?
An alternative reason for recent trades could be insiders taking advantage of the share price volatility. Volatility provides an opportunity to trade on market inefficiencies when the stock is under-priced compared to the stock’s intrinsic value. Within the past three months, Quabit Inmobiliaria’s share price traded at a high of €2.26 and a low of €1.91. This suggests some volatility with a share price change of of 17.82%. Perhaps not a significant enough movement to warrant transactions, thus motivation may be a result of their belief in the company in the future or simply personal portfolio rebalancing.
Next Steps:
Quabit Inmobiliaria’s insider meaningful buying activity tells us the shares are currently in favour, although the expected earnings growth challenges this conclusion, and the relatively stable stock price may not warrant exploiting any mispricing. Although insider buying can be a useful prompt, following the lead of an insider, however, will never replace diligent research. I’ve compiled two key factors you should further examine:
Financial Health: Does Quabit Inmobiliaria have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Other High Quality Alternatives : Are there other high quality stocks you could be holding instead of Quabit Inmobiliaria? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
