Novo Nordisk Insiders Buy a Ton of Stock

Insider buying can provide clues about a stock’s next move. Insiders sell company stock for a number of reasons. Yet they only buy stock for one reason – they expect it to rise.

In this report, we are going to highlight some interesting insider buying at Novo Nordisk A/S (NOVOB:DC). Novo Nordisk is a Danish healthcare company that is focused on diabetes, obesity, rare blood, and endocrine diseases. Globally, it produces around 50% of the world’s insulin supply. The company is listed on the OMX Nordic Exchange Copenhagen and currently has a market capitalization of approximately DKK 2,194 billion.

Insider Buying at Novo Nordisk

Our data shows that between February 2 and February 10, two insiders at Novo Nordisk purchased company stock. Those who bought shares were:

• Board member Jeppe Christiansen (11,000 shares @ DKK 910.85 per share)

• Board member Kasim Kutay (1,489 shares @ DKK 961.62 per share)

Combined, the insiders invested around DKK 11.35 million in company stock.

Investment Background

The first insider, Mr. Jeppe Christiansen possesses a prominent background in investment management and currently serves as the CEO of Maj Invest Holding (an asset management firm) and previously performed his duties as the CEO of LD Pensions.

What stands out is that Mr. Christiansen has made a large stock purchase that increased his holdings substantially by +32%. This suggests that he strongly believes the stock is to move higher.

The second insider, Mr. Kasim Kutay has a strong background in managing operations of large-scale organizations including their financial positions. Mr. Kutay currently serves as CEO of Novo Holdings A/S and acts as a board member for Novozymes A/S.

The point to focus on is that Mr. Kutay has recently increased the size of his holding in the company by around 60%. This is an indication that his trust lies in the surge of the stock.

Strong Top-line Growth

Novo Nordisk’s recent Q4 results showed that the company has a lot of momentum right now.

For the quarter, sales were up 26% year on year to DKK 177.0 billion. Meanwhile, operating profit was up 28% year on year to DKK 74.8 billion. Earnings per share came in at DKK 6.02 – above the consensus forecast of DKK 5.80.

On the back of this strong performance, the company announced a new 12-month share repurchase program of up to DKK 28 billion.

"We are very pleased with the double-digit sales growth in 2022 driven by our innovative GLP-1-based diabetes and obesity treatments, and more than 36 million people living with diabetes are now benefiting from our treatments. We continued to make progress on our strategic aspirations and in 2023, we will continue our focus on strong commercial execution, expanding and progressing our innovative pipeline, and investing significantly in the expansion of production capacity for current and future portfolio," commented President and CEO Lars Fruergaard Jørgensen.

In light of the momentum the company has right now, we see this insider buying as a bullish signal.