Seeking Alpha
Long/short equity, insider ownership
Profile| Send Message|
( followers)  

In this article, I will feature one chemical company that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.

  2. The stock is sold by no insiders in the month of intensive purchasing.

  3. At least two purchasers increase their holdings by more than 10%.

BioAmber (NYSE:BIOA) is a sustainable chemicals company. Its proprietary technology platform combines industrial biotechnology and chemical catalysis to convert renewable feedstock into chemicals for use in a wide variety of everyday products including plastics, resins, food additives and personal care products.

(click to enlarge)

Insider buying during the last 30 days

  • Kurt Briner purchased 13,000 shares on August 15 and currently holds 26,000 shares or 0.1% of the company. Kurt Briner is Chairman of the Board. Kurt Briner increased his holdings by 100% in August.
  • Michael Hartmann purchased 2,000 shares on August 29 - September 3 and currently holds 18,720 shares or 0.1% of the company. Michael Hartmann is Executive Vice President. Michael Hartmann increased his holdings by 12.0% during the last 30 days.
  • Jean-Francois Huc purchased 5,000 shares on August 29 and currently holds 18,720 shares or 0.1% of the company. Jean-Francois Huc is BioAmber's CEO. Jean-Francois Huc increased his holdings by 36.4% in August.

Insider buying by calendar month

Here is a table of BioAmber's insider-trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
September 20131,7000
August 201318,3000
July 201300
June 201300
May 201300

There have been 20,000 shares purchased and there have been zero shares sold by insiders this year.

Financials

BioAmber reported the second-quarter financial results on August 12 with the following highlights:

Revenue$1.0 million
Net loss$6.1 million
Cash$103.0 million
Debt$27.9 million
Net cash$75.1 million
Net cash per share$4.08

Outlook

BioAmber's Sarnia plant is the main focus of its business and BioAmber is pleased with its progress, which remains on track. When completed, the Sarnia plant will be the world's largest succinic acid production facility, benefiting from competitive energy and sugar prices and economies of scale.

With the proceeds from the IPO and other sources of funding BioAmber has secured, BioAmber believes it has sufficient cash to build and start up the Sarnia plant.

Competition

BioAmber expects its advanced bio-based specialty chemicals to compete with petrochemical equivalents that are proven in the market and manufactured by established companies, such as Gadiv Petrochemical Industries, Kawasaki Kasei, DSM (OTCQX:RDSMY) and numerous small Chinese producers including Anqing Hexing Chemical, and Anhui Sunsing Chemicals. In addition, BioAmber's products will compete against other companies in the bio-based specialty chemical industry, both early stage companies, such as Genomatica (for bio-based 1,4 BDO) and Myriant Corporation (for bio-succinic acid), and established companies, such as a collaborative venture between DSM and Roquette Frères S.A. and a collaborative venture between BASF (OTCQX:BASFY) and Purac (both for bio-succinic acid).

Conclusion

There have been three different insiders buying BioAmber and there have not been any insiders selling BioAmber during the last 30 days. All three of these insiders increased their holdings by more than 10%. BioAmber has an insider ownership of 4.70%.

There are two analyst buy ratings, one neutral rating and zero sell ratings with an average target price of $15.00. BioAmber has a net cash position of $4.08 per share and the stock is currently trading at $4.19. I believe the stock could be a good pick at the net cash position of $4.08 per share.

Source: Insiders Are Buying BioAmber