Strong Insider Buying Pattern Warrants Entry
One of the top players in the agribusiness and food industry and part of the big “ABCD†four that dominates the space (Archer Daniels Midland (ADM), Cargill and Louis Dreyfus), Bunge Ltd (BG) witnessed fourteen different open market purchases in 2020, with two of those buys holding a stronger buying signal than others. With additional factors at play include the presence of activist investors, new CEO and a potential separation on the table, we’re going to take an initial stake at current levels.What's Interesting? The Edge Intelligence...
During the month of February and March 2020, there were multiple buys (14 buys in total) from the management at BG where they dipped into their own pocket to buy shares in the open market. These purchases include the CEO, who assumed the role last year, doubled his position in the stock.
However, among this cluster of buys, we’ve identified two particular insiders in our analysis that have displayed above average purchases versus previous buys in March, making the overall insider pattern very positive.
The Edge View...
Sugar exit will create value for core business: BG’s core segment Agribusiness (~69% of FY19’s revenues) has been performing well for BG, but poor performance by the Sugar division is putting pressure on BG’s overall bottom-line. By Spinning off the Sugar business, the additional resources generated can be utilized by BG to concentrate on its core business. A hike in its dividend or a share buyback program can also be a rewarding possibility for investors.
The Edge Group - Global Fundamental Catalyst Investing. The Edge provides investors with access to hidden corporate value from Global Special Situations using a pioneering approach to investments. Founded in 2005 by fund management and investment banking professionals to provide high quality, private equity-level research on Global Corporate Divestitures for the benefit of fundamental event-driven, growth and value-oriented investors in this difficult to track, but proven investment space.
The Edge will look to screen and analyze include Spinoffs; Reverse Morris Trusts; Squeeze Outs; Privatizations; Demutualization; Deep Discounted; Rights Issues; Rights Offering; Restructuring; Insider Purchases / Buying Change of Management / CEO Change; Deteriorating fundamentals; Post-Bankruptcy; Reorganization; Tender Offer; M&A Deals; Secondary Offering; Share Swap; Thrift Conversions; Share Buybacks; Activist; Mergers. All analyzed from a fundamental point of view.
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