[ad_1]
FrankfortPrice question: What do the shares of BASF, Daimler, Jost Werke, Klöckner & Co and Krones have in common? Answer: First, since the beginning of the year, they have all lost about a quarter of their value, much more than the respective indexes in which they are listed. Secondly, executives or board members seem to think that price erosion has been exaggerated – and so have recently purchased large-scale corporate shares.
They are not alone with that. In the last two weeks, 137 "insiders" have bought German shares. That's 13% more than between the beginning and mid-October. Average purchase volumes have also increased. "This shows the great interest of top leaders in buying shares of their own companies," says Olaf Stotz. The badet management professor at the Private University Frankfurt School has long been dealing with insider purchases.
These transactions are legal as long as they do not use unpublished information relevant to the stock market and do not report their securities transactions to Bafin Financial Regulator. Stotz said: "Insiders usually buy when prices are low."
In fact, boards of directors and supervisory boards, which can better badess their company than traditional investors, pay more attention to fundamental valuation criteria than other investors. Relevant ratios include, for example, the price / cash flow ratio, the price-to-book ratio or the price / earnings ratio.
Easy recovery
According to Stotz, insiders hardly fear the general threats to the markets, such as the trade war, the imminence of Brexit or the heavily indebted Italy budget dispute. That was exactly the problem. Due to general concerns over politics and the economy, hopes for higher prices this year have not materialized.
This is particularly noticeable with regard to insider trading at BASF, Daimler and Klöckner. All companies have already made large purchases of insiders this year. After all, the shares of the three companies over the past few days relative to their previously achieved levels, sometimes the lowest in several years, have slightly increased again. And basically, the situation does not seem so bad.
In the third quarter, for example, the chemical group BASF recorded a net profit ten percent below that of the same period of the previous year. But it was still about 1.2 billion. The group's managing director, Martin Brudermüller, is not satisfied with the business development. However, he apparently considers that the action is cheap and, together with three other members of BASF's board of directors and chairman of the supervisory board, Jürgen Hambrecht, has bought shares at a significantly lower price (see board).
Hambrecht proposes double
The former boss of BASF, Hambrecht, was twice the insider. He also sits on the Daimler Supervisory Board and has bought shares with his son Stefan and Daimler. Daimler has scared investors twice this year by announcing a drop in profits. In the third quarter, the automotive group's net profit dropped 19% to just under 1.8 billion euros.
However, the result was characterized by high special loads. Analyst Frank Biller of Landesbank Baden-Württemberg therefore expects a "strong fourth quarter". Of course, the diesel scandal and the commercial dispute pose continuing high risks for the entire automotive sector. But: "The many stressors must now be known to investors," say experts at Commerzbank Wealth Management.
Klöckner & Co., a steel company in the steel sector, is one of the few companies to have recorded a net increase in the third quarter. Its net profit doubled to just under 22 million euros, mainly because of rising steel prices. Only badysts expected an even better result for operating profit, which would have resulted in a decline in the stock.
For the steel trader, who, according to Commerzbank, is growing more and more into a steel processor, the biggest insider deal of the last two weeks has taken place. The supervisory board and entrepreneur Friedhelm Loh has bought shares for just under 14.9 million euros through the Swoctem investment company. Already in September, the largest shareholder had acquired papers for nearly ten million euros. He now holds more than a quarter of Klöckner's shares.
There have also been insider sales of the company in recent weeks, but only in very small companies below SDax. The insider barometer, which Professor Stotz calculated with Commerzbank Wealth Management every 14 days from the purchases and sales of all listed companies, fell slightly to 155 points.
With a level of more than 150 meters, it theoretically provides a strong buy signal for equities for seven weeks. However, the Dax has since lost nearly four percent below the line, at the lowest it was even over six and a half.
Does the barometer of insiders provide a misinterpretation? "The barometer of insiders is not a traffic light, which indicates that you absolutely must buy environmentally friendly products, but that is not the case in the capital market," says Stotz. But he sees a chance that current prices in the medium and long term are favorable, so that the market is recovering.
Currently, the many general risks are difficult to calculate, especially the situation in Italy. As a result, traditional investors and insiders may benefit from cheaper prices in the near future.
Source link
