Frankfurt. What do Bjørn Gulden, Armin Papperger and Michael Sen have in common? They are CEOs of DAX companies and obviously see opportunities in their companies' shares. This is shown by Handelsblatt's September evaluation of the largest insider deals at German companies.
At Adidas, Rheinmetall and Fresenius, the bosses themselves took action in September and bought shares in their own companies. And there is another similarity: all three stocks have fallen in the past twelve months.
Olaf Stotz, Professor of Asset Management at the Private University Frankfurt School of Finance & Management, says: “The CEOs bought anti-cyclically against the trend, and that makes the shares also worth a look for private investors.” But he also finds two large insider purchases from the second tier interesting.
Stotz has been involved in the legal stock transactions that companies report to the Bafin financial regulator for more than 20 years. He analyzes the Bafin data monthly for the Handelsblatt.
The most interesting insider purchase in September for Stotz is that of Gulden at Adidas. The sporting goods manufacturer's shares have lost more than 20 percent since the quarterly figures were presented at the end of July alone. According to Gulden, the second quarter actually went better than expected and the group increased its forecasts for the current year.
Gulden last bought Adidas shares at the end of July and followed up again in September with purchases totaling a good half a million euros at prices around 140 euros.
Stotz believes Adidas shares are cheaply valued. It only costs around 15 times the net profit expected by analysts on average for the next twelve months. According to analysts such as Thomas Maul from DZ Bank, it “does not adequately reflect the qualities of Adidas”.
Unlike Adidas, Rheinmetall recently had to slightly lower its sales forecast for the current year at the beginning of August. This was mainly because the federal government stopped the Bundeswehr's frigate program, which Rheinmetall wanted to take over.
Rheinmetall shares then continued to slide. It has now lost more than half of its value since its record high a year ago. Since the start of the Ukraine war in February 2022, it is still up around 850 percent.
At the end of September, Papperger bought shares for almost half a million euros at a price of around 950 euros. For years, Papperger and other Rheinmetall board members and supervisory boards have been among the most active insiders. They only appeared as buyers on the Handelsblatt list of the largest insider deals in the past twelve months.
The shares of the healthcare group Fresenius have only lost around seven percent in the past twelve months and have already recovered significantly from their annual low at the end of May. However, the good quarterly figures presented at the beginning of August and the increased annual outlook no longer supported the share sustainably.
Sen then bought shares for just under 200,000 euros at the beginning of September at an average price of 47.70 euros. Shortly afterwards, CFO Sara Hennicken followed up with purchases for 100,000 euros at a price of 44.50 euros.
Most recently, Sen and other Fresenius board members made it onto the Handelsblatt list of the largest insider purchases at the beginning of April with purchases totaling 875,000 euros at a price of around 44 euros. Recent purchases are significantly smaller, but given the positive outlook in the healthcare sector and the comparatively low valuation, Stotz believes Fresenius shares are interesting.
There were even larger insider purchases than at Fresenius in September at the engine manufacturer Deutz and the online broker Flatexdegiro. Both are listed in the MDax of medium-sized companies.
CEO Sebastian Schulte and other board members bought the Deutz shares at the beginning of August. After the purchases, Deutz shares rose by more than a third to around 13.30 euros by September 10th.
However, it then fell again, mainly because Deutz raised almost 179 million euros through a capital increase from large investors in mid-September and issued the shares at 11.70 euros. Above all, Deutz wants to expand its arms business and needs capital for this.
Deutz supervisory boards took advantage of the fallen price to buy a few days after the capital increase. The stock fell a little further after that, but over the past twelve months it is still up almost 20 percent.
Flatexdegiro shares are around 35 percent below their record high reached at the beginning of February, but have fluctuated very strongly this year. At the end of September, Janos Benon, who had since been promoted to co-chief executive, took advantage of the falling prices again to buy the shares through an asset management company and risk director Evgeni Kaplun.
After a strong first half of the year, the online broker significantly increased its profit forecast for the current year. Flatex, like the entire investment industry, is hoping for customer inflows through the retirement savings account starting in the new year.
By far the largest share sale by insiders in September was with SDax-listed smart home provider Shelly, worth 47.7 million euros. The reason for this is that the French electrical company Schneider Electric wants to take over Shelly.
Co-founders and largest shareholders Dimitar Stoyanov Dimitrov and Svetlin Iliev Todorov support the takeover. Todorov sold his shares through a holding company in September.
The DAX group Siemens Energy also reported a comparatively small sale at the end of September. Supervisory board member Robert Kensbock sold shares worth a total of around 160,000 euros.
Most recently, Kensbock sold Siemens Energy shares for a good 80,000 euros in April. The share then rose a little further to a record high of over 190 euros. Since then it has lost more than a fifth of its value.
A total of 64 companies reported share purchases by their executives to the Bafin financial regulator in September, 15 more than in August. Share sales were reported by 16 companies, only one fewer than in the previous month.
