The Motley Fool

Two FTSE 100 shares that have seen insider buying in the stock market crash

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Businessmen teamwork brainstorming meeting.
Image source: Getty Images

Insider buying – where corporate executives and directors are buying shares in their own companies – is definitely something that is worth keeping a close eye on when researching stocks.

An insider may sell company stock for a variety of reasons (paying tax liabilities, diversifying their portfolio, buying property, etc). However, if they’re buying, there’s only one reason – they expect the stock to rise.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story. In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

In the current environment, where economic uncertainty is so high, I’d argue insider buying carries even more weight. If an insider is buying company stock now, it sends a clear signal they think their business is resilient enough to weather the economic downturn we’re facing.

They also believe the share price is likely to rebound. That’s extremely useful information to know, given that some companies may not survive the next 12 months.

With that in mind, here’s a look at two FTSE 100 firms that have seen significant levels of insider buying over the last month.

Insider buying at Reckitt Benckiser

One is FTSE 100 stock Reckitt Benckiser (LSE: RB). It manufactures products consumers tend to buy irrespective of economic conditions. It also manufactures products likely to be in high demand in the current environment, such as Dettol disinfectant and wipes, Lysol disinfectant spray, and Mucinex cough medication.

Over the last month, a number of top-tier insiders have purchased shares including:

  • CEO Laxman Narasimhan (£1m worth of stock)

  • CFO Jeffrey Carr (£1.15m)

  • COO Health Aditya Sehgal (£560k)

  • COO Hygiene Harold Van Den Broek (£480k)

This level of buying – which is the highest for a number of years – looks very interesting to me. I like the fact that senior management, who are likely to have the most information on the company’s sales and future prospects, have been loading up on stock. This suggests management is confident about the future, which is reassuring in the current environment.

Just recently, I said RB is a good stock to own right now. This high level of insider buying reinforces my view. 

Insider buying at M&G

Another FTSE 100 company that’s seen insider buying in recent weeks is financial services group M&G (LSE: MNG), which recently demerged from Prudential. Since mid-March, the following insiders have loaded up on stock:

  • CEO John Foley ( £167k worth of stock)

  • CIO Jonathan Daniels (£168k)

  • Chairman Mike Evans (£50k)

  • Independent Directors Clare Thompson (£34k) and Clive Adamson (£4k)

This is another stock that looks quite interesting to me, given the high level of buying.

Over the last six weeks, M&G shares have fallen from near-250p to around 110p. That’s a huge drop of more than 55%. Yet less than a month ago, the company said: “We have made a good start to life as an independent business and we are strongly positioned for growth.”

It also says its balance sheet was “resilient” and that its Solvency II ratio was 166% – firmly within its risk appetite.

All things considered, I think the medium-to-long-term risk/reward proposition here is attractive. Given the high level of insider buying, I think there’s a good chance the stock will bounce back from the recent fall, in time.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Edward Sheldon owns shares in Reckitt Benckiser and Prudential. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.