Top-level insiders such as C-suite executives tend to have an information advantage over other investors because they have access to the most up-to-date data on their businesses. If these insiders are buying company stock, it’s generally worth a closer look.
In the report, we are going to highlight some interesting insider buying at Braemar Hotels and Resorts Inc (BHR:US). Braemar Hotels and Resorts is a real estate investment trust that is focused on luxury hotels and resorts in the US as well as the Virgin Islands. Its strategy is to invest primarily in full-service luxury hotels and resorts that are anticipated to generate RevPAR of at least twice the current US average RevPAR for all hotels. The company is listed on the New York Stock Exchange and currently has a market capitalization of $430 million.
Braemar Hotels and Resorts Inc: Insider Buying
Our insider transaction data shows that on March 30, Braemar’s Chief Accounting Officer Mark Nunneley bought 9,000 Preferred Series E shares at a price of $22.50 per share. This trade cost the insider just over $200,000 and increased his holding to 18,000 Preferred Series E shares.
Mr. Nunnely has considerable experience in the hospitality industry. Currently, he is Chief Accounting Officer of both Ashford Hospitality Trust and Braemar Hotels and Resorts. He has held the position of Chief Accounting Officer at Ashford Hospitality Trust since 2003, and before that was Chief Financial Officer of the company’s predecessor. This background means that he is likely to have a good understanding of his company’s prospects.
What’s interesting about this trade is that it has doubled the size of Mr. Nunnely’s holding. This suggests he sees a lot of value in the stock at present. Additionally, it follows some cluster buying from insiders last year.
Braemar Hotels and Resorts recently posted a very encouraging set of Q4 results.
For the period, comparable RevPAR for all hotels increased 163% to $239.62 – the highest quarterly RevPAR in the company’s history. Meanwhile, adjusted EBITDAre was $29.4 million for the quarter, reflecting a growth rate of 15.4% over the fourth quarter of 2019. At the end of the period, the company had cash and cash equivalents of $216.0 million on its books.
The group noted that overall leisure demand remained strong during the quarter with 13 of its 14 properties generating positive Hotel EBITDA, and nine of its 14 properties achieving greater than 60% occupancy.
“We continue to be pleased with the incredibly strong operating performance of our luxury resorts,” said Richard J. Stockton, Braemar’s President and CEO. “We achieved the highest quarterly RevPAR in our Company’s history, and our portfolio was cash flow positive for the fourth consecutive quarterly period,” he added.
Looking ahead, the company said that it expects to achieve 2019 comparable RevPAR levels during calendar year 2022, and expects to meet or exceed 2019 comparable hotel EBITDA by calendar year 2023.
“We enter 2022 well-positioned and excited about our opportunities to deliver continued growth. Strong forward bookings suggest further improved operating results for the first quarter of 2022,” said Mr. Stockton.
In light of the good performance here, we see the insider buying as bullish.