Corporate insiders tend to have the most up-to-date information on their companies’ operations. If these individuals are buying company stock, it’s often a sign that business performance is strong and that the outlook for the stock is favorable.
In this report, we are going to highlight some interesting insider buying at Academy Sports and Outdoors Inc (ASO:US). Academy Sports and Outdoors is a US retailer that specializes in sporting and outdoor recreation products. Founded in Texas in 1938, it now has around 260 stores across 16 US states. It is listed on the Nasdaq Global Select Market and currently has a market capitalization of $3.8 billion.
Academy Sports and Outdoors Inc: Insider Buying
Our data shows that on January 10, board member Brian Marley bought 10,000 $ASO shares at a price of $39.46 per share. The trade cost the insider $394,600 and increased his holding to 45,801 shares.
First Insider Buy Since IPO
This trade from Mr. Marley is worth highlighting for several reasons.
Firstly, this is the first purchase from an insider since the company’s Initial Public Offering (IPO) in October 2020. This tells us that insider buys here are not very common.
Secondly, the trade has increased the size of the insider’s holding by 28%. This suggests he is very confident the stock is set to rise.
Third, Mr. Marley has considerable experience in the retail sector. Previously, he was Executive Vice President and CFO of American department store chain Belk, Inc. from 2000 to 2013. This means he is likely to have a good understanding of the prospects here.
Fiscal 2021 Guidance Raised
Academy Sports and Outdoors posted a strong set of Q3 results in December.
For the period, net sales came in at a Q3 record of $1.59 billion, up 18.1% year on year and up 39.1% on Q3 2019. Meanwhile, pre-tax income increased 251.6% to $205.3 million compared to $58.4 million a year earlier.
Other highlights of the quarter included 25.9% growth in e-commerce sales and a 250 basis point improvement in gross margin. The company advised that it continued to benefit from the strategic initiatives implemented to improve merchandise planning and allocation, operations, customer service, and supply chain.
As a result of these strong results, the group raised its fiscal 2021 guidance. It now expects net sales of between $6.675 billion and $6.740 billion, which would represent growth of 17.3% to 18.5% on the previous fiscal year.
In light of these good results and the guidance increase, we see the insider buying here as a bullish indicator.