Power Corp. (CA:POW) CEO Jeffrey Orr acquired 25,000 shares of the financial conglomerate’s stock at an average price of $34.89 a share for an outlay of nearly $873,000, according to a June 13 filing. That bumps up his position in POW stock by 4.2% to 625,000 shares.

There’s a saying that insiders sell company stock for all sorts of reasons, but there’s only one reason they buy: the stock is a good value at current prices.

While Power’s shares are up more than 7% year-to-date, they are down 22% from their August 2021 five-year high of $44.53.

Orr’s purchase could be a coincidence. More likely, it’s a smart move on the CEO’s part to add some more shares at a reasonable price. His recent buy suggests Power’s shares are a buy under $35.

Misleading Buying History

According to Power’s 2023 proxy, through Pansolo Holding Inc., the Desmarais family owns 99.73% of the company’s Participating Preferred Shares and 7.91% of its Subordinate Voting Shares. The Participating Preferred Shares have 10 votes, while the Subordinate Voting Shares have one vote.

As a result, Pansolo holds 547.15 million votes from its Participating Preferred Shares and 48.36 million shares from its Subordinate Voting Shares. As a result, the family’s holding company has 51.3% of the 1.16 billion in total votes.

No other shareholder controls more than 10% of the company.

According to its proxy, CEO Orr held 600,210 Subordinate Voting Shares as of March 17, 2023. In addition, he had Deferred Share Units (DSIs), Performance Share Units (PSUs), and Performance Deferred Share Units (PDSUs) totaling 962,866. Orr’s shareholding was valued at $52.7 million as of March 17, 2023, 4.22x the company’s minimum equity requirement for the CEO.

Orr also holds DSUs and shares in its Great-West Lifeco (CA:GWO) and IGM Financial (CA:IGM) subsidiaries. Power owns 68.2% of Great-West Lifeco and 62.1% of IGM Financial through its wholly owned subsidiary, Power Financial.

Orr acquired 420,000 POW shares in February 2020 as part of the reorganization that saw Power Financial go from a 64%-owned subsidiary to 100% ownership.

Three Key Dates

Since the reorganization, three dates have been critical to this analysis.

On Nov. 17, 2020, Orr exercised options to buy 713,501 shares at an exercise price of $26.80. He disposed of them the same day, generating approximately $1.5 million on their disposition. He did the same thing a second time, on May 25, 2021, exercising options on 628,241 shares at an exercise price of $23.88, generating an approximate profit of $9.4 million. Finally, on Feb. 15, 2022, he exercised 150,000 shares at an exercise price of $31.03 and sold them the same day for an approximate profit of $1.5 million.

However, it’s not all bad news. Since the last exercise in February 2022, Orr’s made three purchases for $25,000 each in the open market: Feb. 18, 2022, at $40.40; June 21, 2022, at $33.69; and, the latest on June 13 at $34.89.

While Orr’s buying history is deceptive, he has invested $2.72 million since February 2022, with no dispositions over the past 17 months.

So, it remains true that the CEO is buying Power shares while they are cheap. If he thought the shares were selling at fair value or perhaps overvalued, he’s got close to three million in unexercised options remaining through a March 21, 2032, expiration.

Trading at Big Discount

Over the past 52 weeks, POW is up 12.1%, GWO is up 20.6% and IGM stock is up 3.3%. Despite the reorganization in 2020, Power stock continues to get a conglomerate discount from investors.

Power’s 68.2% stake in Great-West Lifeco is worth $24.0 billion. Its 62.1% stake in IGM Financial is worth $5.9 billion. Power’s market cap is currently $21.5 billion, a 28% discount to its majority ownership in the two companies.

That doesn’t take into account all its other holdings, including a 14.9% stake in Groupe Bruxelles Lambert (US:GBLBY), a Europe-based investment company that holds equity positions in public and private assets such as Pernod Ricard (US:PDRDY) and Adidas (US:ADDYY). That’s worth approximately US$1.6 billion based on GBL’s current market cap.

When a CEO’s buying, that’s an excellent sign.

This article originally appeared on Fintel

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