Cluster buying is a buying pattern that refers to three or more insiders investing in company stock in a short period. Often, such clusters are viewed as a bullish signal for the business’s future prospects.

Using 2iQ’s extensive insider transaction data, we have identified our top five best-performing cluster buys from the last 12 months. Amongst the most impactful investments were Adtalem, Uni-Select, Orasure, and more.

Biggest Cluster Buying Gains

Commerzbank AG (CBK:GR)

In May 2022, 2iQ reported on a wave of cluster buying at a German bank. Commerzbank is a significant player in the financial industry and any insider activity at the company is worth a close analysis.

This bullish wave of insider buying featured multiple top-level company executives.
Six insiders bought stock on the same day in May worth between €6.10 and €6.29 per share:

Chairman of the Management Board and CEO Manfred Knof bought 16,400 shares
COO Jörg Oliveri del Castillo-Schulz bought 10,000 shares
CFO Dr. Bettina Orlopp bought 15,945 shares
Executive Board member Thomas Schaufler bought 10,000 shares
Executive Board member Michael Kotzbauer bought 10,000 shares
Chief Risk Officer Dr. Marcus Chromik bought 16,155 shares

Combined, these insiders spent around €490,000, a sum of insider buying not seen in a quarter at Commerzbank in over five years.

We flagged this cluster following solid quarterly results; since then, CBK has risen by around 70%.

AMG Advanced Metallurgical Group NV (AMG:NA)

We reported on the Dutch company AMG Advanced Metallurgical Group in August 2022.

The firm produces and sells specialty metals and mineral products to a global client base and provides related vacuum furnace systems and services.

This wave of cluster buying included top-level insiders:

Chairman and CEO Heinz Schimmelbusch bought 38,500 shares at €26.28 per share
Supervisory Board member Warmolt Prins bought 5,400 shares at €27.14 per share
Supervisory Board member Herb Depp bought 2,950 shares at €26.89 per share

Previously not reported, another top-level insider became a part of this wave:

Chairman of the Supervisory Board Prof. Steve Hanke bought 35,778 at €27.034 per share.

The four Insiders spent around €2,200,000 – AMG has since risen by 39% in value, worth around €1,000,000. BothCEO and Chairman of the Supervisory Board stand out in this cluster, investing just shy of €1,000,000 respectively. Mr. Schimmelbusch has been the company's CEO since its IPO in 2006 and has a strong understanding of the business, while Mr. Hanke has been serving in his position since 2019 and is a professor of applied economics.

OraSure Technologies Inc (OSUR:US)

When there’s a wave of cluster buying from a company’s board, it is often a bullish signal. OraSure Technologies is a NASDAQ-traded medical company specializing in medical testing kits for infectious diseases.

In September 2022, 2iQ reported on a large cluster at OraSure:

Chairwoman Mara Glickman Aspinall bought 6,000 shares at $4.19 per share
Board member Nancy Gagliano bought 2,200 shares at $4.39 per share
Former Chairman Michael Celano bought 12,000 shares at $4.49 per share
Board member Ronny Lancaster bought 50,000 shares at $4.00 per share

The total spend from these insiders on OSUR was around $290,000. Since then, OraSure’s stock value has risen by nearly 51.75%, meaning this cluster is worth around $426,144 today.

We highlighted this trade for its scale and because the insiders involved are highly experienced in the medical industry, with several decades of experience in their respective fields. Those with a strong understanding of a company’s field are well-positioned to make investments.

Uni Select Inc (UNS:CN)

2iQ reported on Uni-Select Inc in June 2022. A Canadian company listed on the Toronto Stock Exchange, Uni-Select distributes automotive products in North America and the UK.

Chairman and CEO Brian McManus bought 15,000 shares at CAD $28.41 per share
CFO Antonio Pagano bought 2,900 shares at CAD $29.07 per share
President and COO of Finishmaster Inc (US Division), Mike Sylvester, bought 9,000 shares at CAD $29.54 per share

Previously not reported, another top-level insider became a part of this wave:

President and COO of Canadian Automotive Group (Canadian Division**) Emilie Gaudet** bought 1,702 shares at CAD $29.38 per share

Rising from CAD $21.07 to CAD $40.29, this proved to be a very profitable cluster. These top-level insiders have gained around a CAD $400,000 return on investment.

Adtalem Global Education Inc (ATGE:US)

Adtalem Global Education is a workforce solutions provider operating universities in the medical and healthcare space.

2iQ analysts identified significant cluster buying activity in February 2022. Seveninsiders at Adtalem purchased stock, including:

Chairman Michael Malafronte bought 52,600 shares at $23.75 per share
Board Member Lisa Wardell bought 4,020 shares at $24.48 per share
Board member Ken Phelan bought 4,086 shares at $24.47 per share

These three insiders spent around $1,450,000 in total on ATGE stock. Michael Malafronte, an experienced investor and former Portfolio Manager, purchased $1,249,250 worth of stock.

Since 2iQ highlighted this cluster at around $23.94 per share, ATGE has skyrocketed by around 68% to $40.16 per share. For Mr. Malafronte, that’s nearly a 70% gain on their investment in 12 months, worth under $900,000.

Conclusion

Cluster buying is a helpful tool for identifying potential investment opportunities based on bullish internal sentiments.

The above companies saw significant stock value increases following a wave of cluster buying by top-level insiders, which we reported based on several additional signals such as investor background, company performance, and more.

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