Bunge’s Executives Are Betting on the Crop Giant Amid Stock Rout

(Bloomberg) -- The coronavirus-fueled global rout is making crop giant Bunge Ltd. a buying opportunity for its managers.

Chief Executive Officer Greg Heckman, who is overseeing the company’s turnaround plan, bought $4.78 million in Bunge stock in the open market last week, according to regulatory filings. Brian Zachman, president of global risk management, and board members Jay Winship and Erik Fyrwald also made large purchases, all of more than $400,000.

The executives are buying shares at a time when global markets are losing trillions of dollars in value as the pandemic threatens to send the world economy into recession. An oil price war between Saudi Arabia and Russia also hit commodities and related-equities this week.

“The significant purchases of Bunge shares in the open market by our senior leadership are evidence of management’s and the board’s continued confidence in the fundamentals of the business,” Bunge said in a statement. “Our management’s interests are fully aligned with those of other shareholders.”

Bunge has been restructuring after oversupply and trade disruptions squeezed margins. The company, has also reduced costs, cut jobs and offloaded some businesses including including striking a joint venture with British oil major BP Plc for its Brazilian sugar unit, selling its Brazilian margarine business to JBS SA and exiting ethanol production in the U.S.

The global equities sell-off has pushed down Bunge’s stock more than 30% in the past month, while agribusiness rival Archer-Daniels-Midland Co. has faired a little better. On Friday, Bunge shares fetched 10.1 times estimated earnings, making it relatively cheaper than ADM for the first time in more than a year.

Bunge’s changes are starting to pay off, with the company’s results surprising analysts in the fourth quarter. Earnings of $1.27 a share in the period were four times more than the average Wall Street estimate.

While many of its executives are currently being awarded shares as part of their compensation packages, the purchases cited were done in the open market. To be sure, executives were also buying the company’s stock in February, before the virus-led rout.

“I see a lot of insider buying from compensation at this time of year,” said Seth Goldstein, an analyst at Morningstar Inc. in Chicago. “But it could also be the stock price and management reacting to the stock price and buying shares at a price they feel is cheap.”

Here is a list of insider share purchases for last week:

--With assistance from Bill Austin.

To contact the reporter on this story: Isis Almeida in Chicago at ialmeida3@bloomberg.net

To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, James Attwood, Millie Munshi

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