Intercontinental Hotels Group Sees Insider ‘Cluster Buying’ Pattern

If multiple insiders at the same organization are buying company stock simultaneously, it’s often worth taking a closer look. This buying pattern – which is known as ‘cluster buying’ – is a particularly strong insider trading signal.

In this report, we are going to highlight a cluster buying pattern at Intercontinental Hotels Group (IHG:LN). IHG is a leading hotel company that owns a number of well-known hotel brands including InterContinental, Holiday Inn, and Regent. Globally, it has nearly 6,200 hotels in its portfolio. It is listed on the London Stock Exchange and the New York Stock Exchange and currently has a market cap of around £9.10 billion.

Insider Buying at IHG

2iQ data shows that between May 5 and May 10, six insiders at IHG purchased stock. The largest purchase was from Chair Deanna Oppenheimer, who bought 5,000 ADRs at a price of $68.89 per share, spending approximately $344,450 on stock. Board members Byron Grote, Graham Allan, Sharon Rothstein, Duriya Farooqui, and Daniela Barone Soares all made smaller purchases.

Cluster Buying Pattern

It’s interesting to see so many insiders at IHG buy stock simultaneously. Our records show that this does not happen very often. Indeed, this is the first cluster buying pattern observed at IHG in over five years.

What’s also interesting is that several of the insiders have financial backgrounds. Ms. Rothstein currently serves as Operating Partner of Stripes Group, a growth equity firm investing in high-growth consumer and SaaS companies. Meanwhile, Ms. Barone Soares was previously CEO of Impetus, a private equity foundation.

Solid Start to the Year

IHG’s recent Q1 trading update showed that the group has made a solid start to the year.

For the period, group RevPAR was up 33% year on year and up 6.8% on Q1 2019. The Americas delivered year-on-year growth of 18%, while the EMEAA and Greater China regions delivered growth of 64% and 75% respectively. The average daily rate was up 11% on 2022 and up 10% on 2019, while occupancy was almost back at pre-Covid levels.

"We've seen a good start to the year, with continued strong trading in both the Americas and EMEAA, and an excellent rebound in demand in Greater China since the lifting of travel restrictions. Leisure demand has remained buoyant, and there has been further return of business and group travel as expected,” commented CEO Keith Barr.

On the downside, the company flagged ongoing economic uncertainties and tougher comparatives from Q2 onwards.

It also announced that Mr. Barr will be stepping down as CEO in the next future, and being replaced by Elie Maalouf, the current CEO of IHG’s America’s segment.

It seems that insiders here are not too concerned about the economic uncertainty or the change of CEO, however. Their trading activity suggests that they are confident about the future.

We see the insider buying here as a bullish development.