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3 Growth Companies With High Insider Ownership On The German Exchange

AInvestThursday, Oct 3, 2024 11:21 pm ET
2min read
In the dynamic landscape of the German stock exchange, several companies stand out due to their robust growth prospects and significant insider ownership. Insider ownership, which refers to the percentage of a company's shares held by its executives, management, and board members, can serve as a strong indicator of a company's growth trajectory. High insider ownership often signals confidence in the company's future and can positively impact investor confidence. This article explores three such companies: adidas, Redcare Pharmacy, and Zalando.

adidas (XTRA:ADS)
Simply Wall St Growth Rating: ★★★★★☆
adidas AG, with a market cap of €41.57 billion, designs, develops, produces, and markets athletic and sports lifestyle products across various regions. The company's revenue segments include €3.26 billion from Greater China, €2.39 billion from Latin America, and €5.07 billion from North America. With an insider ownership of 16.6%, adidas showcases strong growth potential, with earnings forecasted to grow 41.8% annually, significantly outpacing the German market's 20.2%. Despite facing unfavorable currency effects, adidas has raised its full-year guidance and expects operating profit around €1 billion for 2024.

Redcare Pharmacy (XTRA:RDC)
Simply Wall St Growth Rating: ★★★★☆☆
Redcare Pharmacy NV operates an online pharmacy business across multiple European countries, with a market cap of €2.74 billion. The company's revenue segments include €1.74 billion from the DACH region and €391 million from International markets. With an insider ownership of 17.4%, Redcare Pharmacy NV has demonstrated significant growth potential, with half-year sales reaching €1.12 billion, up from €791.94 million a year ago. Despite recent volatility in its share price and insider selling over the past three months, the company is expected to achieve profitability within three years with earnings forecasted to grow 51.83% annually, outpacing the German market's revenue growth rate of 5.4%.

Zalando (XTRA:ZAL)
Simply Wall St Growth Rating: ★★★★☆☆
Zalando SE operates an online platform for fashion and lifestyle products, with a market cap of approximately €7.45 billion. With an insider ownership of 10.4%, Zalando SE reported strong financial performance for Q2 2024, with sales of €2.64 billion and net income of €95.7 million, up from €56.6 million a year ago. Earnings are forecast to grow nearly 25% annually, outpacing the German market's 20%. Despite CFO Dr. Sandra Dembeck's upcoming departure, Zalando remains undervalued by approximately 50% relative to its estimated fair value and continues to exhibit robust profit growth.

The alignment of interests between insiders and shareholders is a crucial factor in driving these companies' growth trajectories. High insider ownership often indicates that executives and management have a significant stake in the company's success, encouraging them to make strategic decisions that prioritize long-term growth and shareholder value. This alignment of interests can foster a culture of accountability and transparency, further enhancing investor confidence.

In conclusion, adidas, Redcare Pharmacy, and Zalando are three growth companies with high insider ownership on the German exchange. Their strong earnings growth prospects, coupled with the alignment of interests between insiders and shareholders, make them attractive investment opportunities in the German market. As these companies continue to grow and innovate, they are poised to make a significant impact on the broader German economy and the global market.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.