Company insiders tend to have the most up-to-date information on their companies’ operations and future prospects. If they’re acquiring company stock, it is nearly always a positive development.
Here, we are going to highlight insider purchases at Genesco Inc (GCO:US). Genesco is an American footwear and accessories retailer that operates in North America as well as the UK and Ireland. It operates close to 1,500 retail stores and also trades online. The stock is traded on the New York Stock Exchange and currently has a market capitalization of $883 million.
Genesco Inc: Insider Buying
Form 4 filings show that in June, three insiders at Genesco have purchased stock. On 2 June, a Director of Genesco, Gregory Sandfort, purchased 4,280 GCO shares at a price of $58.45 per share. This purchase cost the insider approximately $250,000.
Then, on 3 June, two more Directors bought stock. Mary Meixelsperger purchased 5,000 GCO shares at a price of $58.32, spending close to $300,000 while Angel Martinez purchased 1,715 GCO shares at a price of $58.37, spending approximately $100,000.
Multiple Insider Transactions
Multiple insider purchases within a short period of time are generally a very bullish signal. This buying pattern – which is known as ‘cluster buying’ – signals that there is a consensus of opinion within the company that the stock is set to move higher.
The size of the trades here suggest that the Directors are confident in the outlook for the business. The three trades added together made approximately $650,000 and the trades have significantly increased two of the insiders’ holdings. This sends out a strong signal that they believe the share price will move upwards.
Bouncing Back Strongly
Genesco is bouncing back strongly after it had to close its retail stores during the pandemic last year. Q1 results were ahead of expectations, with net sales up 93% versus Q1 2020 at $539 million – 9% higher than the pre-pandemic results achieved in Q1 2019. GAAP operating income was 71% above the levels achieved in Q1 2019 and GAAP EPS came in at $0.60 versus $0.36 two years ago. Crucially, the company achieved record first-quarter digital revenue.
“Fiscal 2022 is off to a very strong start with a first quarter that meaningfully exceeded our expectations. Our momentum has been building each quarter following the disruption from Covid-19 last year and trends accelerated as the first quarter progressed. Our outperformance was driven by better than anticipated results at every division,” said Mimi Vaughn, Genesco Board Chair and CEO.
Reflecting on these excellent Q1 numbers, we see the recent insider buying at Genesco as bullish. The recent insider trading indicates that the insiders believe the momentum within the business will continue which will continue to push the share price higher.