(0:45) - Insider Buying and What It Does It Signal?
(7:10) - Retail Stocks To Keep Your Eye On: Insider Buying
(25:50) - The Risk and Rewards: Knowing When The Time Is Right
(30:00) - Episode Roundup: BBBY, JILL, CHS, GPS, LB
Welcome to Episode #246 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is going solo, to talk about the cheap retail stocks.
Are the insiders buying these beaten down stocks?
Who are the Insiders?
Corporate insiders are made up of upper level management, including the CEO, CFO, Senior Vice Presidents, Heads of Divisions, the General Counsel and the Head of Human Resources, among others.
Additionally, the directors on the Board are also considered insiders.
All of these people must report their buys, or sells, of company stock within 48 hours to the SEC by filing a Form F-4.
When the insiders buy, it sends a powerful signal because they usually get stock in awards and gifts.
Why buy more?
They buy for the same reason all investors do, they see an opportunity. They get greedy.
Are insiders buying in your favorite beaten down retail stocks?
Insiders Sent a Signal at Bed Bath & Beyond
In July 2020, 2 insiders, both directors, bought shares in Bed Bath & Beyond BBBY.
One director bought 6,000 shares at $8.29 and another bought 34,000 shares at $7.89.
Both had joined the board in July 2019 but these were their first purchases on the open market. They didn’t even buy during the coronavirus sell-off when the shares had traded under $5.
Why buy in July?
What did they know?
Since then, Bed Bath & Beyond shares have soared and are up 38% year-to-date.
Are Insiders Buying at These 4 Cheap Retailers?
1. J.Jill JILL is a women’s apparel and accessories retailer. Shares are still struggling in 2020 and are down 37% year-to-date. Shares are trading under $1.00. Are insiders seeing a deal?
2. Chico’s FAS, Inc. CHS is also a women’s apparel and accessories retailer which owns the brands Chico’s, Soma and White House Black Market. Shares are down 71.4% year-to-date and are near a 5-year low. Shares are now trading under $1.50. Are the insiders diving in?
3. Gap GPS is in a turnaround. Sonia Syngal was named the new CEO in March 2020. The company recently announced the closure of Gap and Banana Republic stores in malls. Shares traded as low as $5.26 in April 2020 but are now over $20 and are up 15.6% year-to-date. Do the insiders believe in the turnaround strategy?
4. L Brands LB operates Victoria’s Secret, PINK and Bath & Body Works. Shares were at 5-year lows earlier in the year during the coronavirus sell-off. But changes in management and a turnaround strategy have seen the shares surge and they’re now up 85% year-to-date. Did the insiders send a signal earlier this year that the shares were a bargain?
Find out all the secrets of insider buying on this week’s podcast.
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The Gap, Inc. (GPS) : Free Stock Analysis Report
Bed Bath Beyond Inc. (BBBY) : Free Stock Analysis Report
Chicos FAS, Inc. (CHS) : Free Stock Analysis Report
L Brands, Inc. (LB) : Free Stock Analysis Report
J.Jill, Inc. (JILL) : Free Stock Analysis Report
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