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6 Company Insiders Tip Capital Into Vapotherm's Latest Equity Financing and Positive Preliminary

Ben Ward

Published: February 16, 2023 3:18 am

Last Updated: February 16, 2023 10:21 am

On Monday afternoon, several form 4’s filed with the SEC for Vapotherm Inc (US:VAPO) revealed several insiders of the company tipped in capital during the company’s latest equity financing transaction. The trades were spotted on Fintel’s insider trading analysis page for VAPO.

Vapotherm is a manufacturer of advanced respiratory medical devices and has treated over 3.6 million patients from the high velocity therapy systems.

To be precise, six company insiders participated in the $23 million private placement with preliminary fourth quarter and full year results. The placement was arranged by William Blair & Co with the deal completed by selling 17.5 million shares at $1.05 each and also 4.4 million warrants.

Many of these insiders had already bought stock in the company in November and December equating to 2.67% of the total float over the last 90 days. Insiders now own a total of 47.60% of the company’s float creating a strong invested interest in the company and its future.

Fintels insider sentiment score of 95.89 is bullish on the company as it ranks VAPO in 36th spot or in the top 0.2% of 14,794 screened companies for the greatest levels of insider trading activity.

There is significant academic research that suggests corporate insiders outperform the market when buying shares in their own companies.

The insiders who participated included VAPO’s Chairman James Linken who bought 238,095 shares worth around $247,000. The Chairman also bought 75,000 shares at the end of November and now owns a total of 485,473 shares.

CEO Joseph Army subscribed for 476,790 shares worth $500,000 and added to his earlier purchase of 750,000 shares in November. Army now has a total of 1,636,769 shares in the company.

SVP and CFO John Landry took up 71,428 shares in the offering worth $75,000 and also bought 151,950 shares across multiple trades in November. Landry now has a total of 381,392 VAPO shares owned.

Board member Lance Berry subscribed for 95,238 shares worth $100,000 and now owns a total of 134,887 shares.

Board member Elizabeth Weatherman purchased 476,190 shares during the offering worth $500,000 and owns a total of 652,372 shares.

Chief Accounting Officer Dorota McKay bought 19,047 shares worth $20,000 and owns a total of 50,982 shares.

Other insiders that bought stock over the last 3 months during November but did not include in the transaction included CTO Brian Lawrence and Board members Anthony Arnerich and Georgie Ramade.

During Vapotherms preliminary update of fourth quarter results, management told investors that it had generated that it will report sales of $18.4 to $18.7 million with a gross margin of 27-28%. The guidance is above Fintel’s consensus revenue figure of around $16 million.

The guidance will mean that Vapotherm’s full year net revenue will fall in the range of $66 to $67 million. Management expects to grow sales to $77 to $79 million in 2023 with 75% of sales coming from disposables revenue and the remainder from capital and service.

Operating expenses in 2022 were in the range of $117.6 to $117.8 million and are expected to decline to $76 to $78 million which will boost gross margins up to 48-50%.

William Blair analyst Margaret Kaczor following the capital raise said that 2023 will be a key year for Vapotherm as the company looks to stabilize and improve utilization while aiming to reach EBITDA profitability by the end of Q4 this year.

Fintel’s consensus target price of $1.48 suggests VAPO could see 59% of additional upside in 2023.

This article originally appeared on Fintel