Top-tier insiders have in-depth knowledge of their businesses. Therefore, when these individuals buy company stock, investors should take note.

In this report, we are going to highlight a recent stock purchase from a top-level insider at 3i Group PLC (III:LN). 3i Group is an investment business that specializes in private equity and infrastructure. A multinational company, it mainly invests in medium-sized businesses in Northern Europe and North America. It’s listed on the London Stock Exchange and currently has a market capitalization of approximately £16.05 billion.

Insider Buying at 3i Group

2iQ data shows that on February 6, 3i’s Chairman David Hutchison purchased 14,075 III shares at a price of £16.35 per share. This trade cost the insider approximately £230,000 and increased his holding to 103,351 shares.

Investment Banker

This trading activity is worth highlighting due to the fact that Mr. Hutchison – who has served on the board of 3i since 2013 – is very experienced in the investment world. Previously, he was Head of UK Investment Banking at Dresdner Kleinwort Limited and a member of its Global Banking Operating Committee. Given his experience, he is likely to have a good understanding of the company’s investment potential. His purchase of 14,075 shares suggests that he is very confident that the stock is set to move higher.

Strong Q3 Performance

3i Group’s share price recently hit record highs on the back of a strong Q3 trading update.

In the update, the group told investors that the company’s NAV per share increased to £16.49 at the end of December – a 27% increase for the first nine months of the financial year.

The company also advised that it generated strong cash flow in its private equity portfolio in the third quarter with £474 million of realized proceeds received from divestments and £166 million in cash dividends. The private equity division was helped by the performance of European discount retailer Action, which generated net sales growth of 30% for the 12 months to January 1, 2023.

Looking ahead, 3i said that it is on track to deliver another year of good growth. In light of this update, and the fact that the stock has a very low valuation right now, we see the insider buying here as a bullish signal.

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