Yahoo Finance Why Did Banco Bilbao Vizcaya Argentaria SA.’s’ (BME:BBVA) Insiders Buy Up More Shares?
Banco Bilbao Vizcaya Argentaria, S.A., together with its subsidiaries, provides retail and wholesale banking, asset management, and private banking services. Banco Bilbao Vizcaya Argentaria’s insiders have invested 80,250 shares in the large-cap stocks within the past three months. A well-known argument is that insiders investing more in their own companies’ shares sends an optimistic signal. A research published in The MIT Press (1998) concluded that stocks following insider buying outperformed the market by 4.5%. However, it may not be sufficient to base your investment decision merely on these signals. Today we will evaluate whether these decisions are bolstered by analysts’ expectations of future growth as well as recent share price movements.
View our latest analysis for Banco Bilbao Vizcaya Argentaria
Which Insiders Are Buying?
More shares have been bought than sold by Banco Bilbao Vizcaya Argentaria insiders in the past three months. In total, individual insiders own over 6 million shares in the business, which makes up around 0.08% of total shares outstanding. Insiders that have recently bought more shares are: Francisco González Rodríguez (board member) and Tomás Alfaro Drake (management and board member) .
Is This Consistent With Future Growth?
At first glance, analysts’ earnings expectations of 51.72% over the next three years illustrates a great outlook going forward which is consistent with the signal company insiders are sending with their net buying activity. Probing further into annual growth rates,Banco Bilbao Vizcaya Argentaria is believed to experience a healthy double-digit top-line growth next year, which is expected to drive significant expected earnings growth as well. This is potentially an outcome of successful growth initiatives in place and strong cost controls, leading to sustainable operations. Insiders recognising these benefits as defensible may accumulate their shares in the company. Another reason could simply be they deem the shares under-priced given the growth potential the business could produce.
Did Insiders Buy On Share Price Volatility?
Alternatively, the timing of these insider transactions may have been driven by share price volatility. Volatility provides an opportunity to trade on market inefficiencies when the stock is under-priced compared to the stock’s intrinsic value. Within the past three months, Banco Bilbao Vizcaya Argentaria’s share price traded at a high of €6.96 and a low of €5.84. This indicates some volatility with a share price change of of 19.18%. Insiders’ purchases may not be driven by this movement but perhaps their view of the company’s growth in the future or simply their individual portfolio rebalancing.
Next Steps:
Banco Bilbao Vizcaya Argentaria’s net buying tells us the stock is in favour with some insiders, which is consistent with the significant expected earnings growth, though share price volatility was perhaps inconsequential to cash in on any mispricing. However, while insider transactions could be a helpful signal, it is definitely not sufficient on its own to make an investment decision. there are two important factors you should look at:
Financial Health: Does Banco Bilbao Vizcaya Argentaria have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Other High Quality Alternatives : Are there other high quality stocks you could be holding instead of Banco Bilbao Vizcaya Argentaria? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
