Insider Buying

Insider Buying Report: Guess? Inc (GES:US)

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Guess? Inc (GES:US)

12-month performance: -38%
Insider activity: Bullish
Insider buying pattern: Large purchase from CEO
Recent news: Encouraging Q2 results

CEOs generally have deep insight into their own companies’ operations. If these insiders are buying stock, investors should take note.

Here, we are going to highlight a large CEO purchase at Guess? Inc (GES:US). Guess? is an American clothing company that has over 700 stores across the world. It’s listed on the New York Stock Exchange and currently has a market capitalization of $719 million.

Guess? Inc: insider buying

Form 4 filings show that on 10 September the CEO of Guess?, Carlos Alberini, purchased 83,000 GES shares at a price of $12.05 per share. This purchase – which cost the insider approximately $1 million – boosted his holding by 35%.

GES-US(chart)    Source: 2iQ Research

High insider IQ

This CEO purchase looks interesting for a couple of reasons. Firstly, Alberini has a good track record when it comes to the timing of his purchase. After he bought Guess? stock in June last year, the stock rose 40% over the next six months. Similarly, when he purchased Guess? stock in July this year, the stock rose around 40% over the next three months.

Secondly, this is a substantial purchase from the insider, which is what we like to see. Our Insider Model views this insider purchase as very bullish.

Dividend resumption

Guess? Inc shares are currently down about 50% year to date. This is due to the fact that the company has been impacted significantly by Covid-19.

However, second-quarter results, issued in early September, showed signs of a recovery. Not only did Guess? beat revenue expectations but it also posted a smaller-than-expected loss. Meanwhile, the company advised that throughout the quarter it repurchased $39 million worth of shares. It also said that it would be resuming its dividend.

In light of this news, we see the insider buying here as a bullish signal. It suggests that the CEO views the stock as undervalued at the moment.

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