Insiders have access to real-time information on their companies and often also have a wealth of experience that can help them evaluate their firms’ prospects. If they are buying company stock, it’s generally worth taking a closer look.
In this report, we are going to highlight some interesting insider buying at Hilton Worldwide Holdings Inc (HLT:US). Hilton is a leading hospitality company that operates in the hotels and resorts space. Globally, it has nearly 7,000 hotels in its portfolio. The company is listed on the New York Stock Exchange and currently has a market capitalization of $39.55 billion.
Hilton Worldwide Holdings Inc: Insider Buying
Our insider transaction data shows that on May 24, board member Douglas Steenland bought 1,967 shares at a price of $127.69 per share. This trade cost the insider $251,156 and increased his holding to 24,053 shares.
Travel Industry Experience
Mr. Steenland has considerable experience in the travel industry. Previously, he worked at Northwest Airlines Corporation between 1991 and 2008, where he was CEO between April 2004 and October 2008. He retired from Northwest Airlines upon its merger with Delta Air Lines, Inc. He also previously served as a director of Travelport, LLC, which provides distribution, technology, and payment solutions to the travel and tourism industries. Given his background, he is likely to have a good understanding of Hilton’s prospects.
What caught our attention here was the size of the trade from Mr. Steenland. Our data shows that his $251k purchase represents the largest buy from an insider at Hilton since August 2015. The fact that Mr. Steenland has made such a large purchase suggests that he is confident the stock is set to move higher.
Share Buybacks Resumed
Hilton’s recent Q1 results showed that the company is making a solid recovery after the pandemic.
For the three months ended March 31, 2022, system-wide comparable revenue per available room (RevPAR) increased 81% compared to the same period in 2021 due to increases in both occupancy and average daily rate (ADR), and fee revenues increased 79% compared to the same period in 2021. Adjusted EBITDA was up 126% year on year to $448 million, while diluted EPS adjusted for special items was $0.71 compared to $0.02 a year earlier.
On the back of this performance, the company resumed share repurchases, repurchasing 907,000 shares of common stock for approximately $130 million in the first quarter, and 1.8 million shares for approximately $265 million through April. Full-year 2022 capital return is anticipated to be between $1.4 billion and $1.8 billion.
"We are happy to report solid first-quarter results, with all segments driving better than expected top line performance in March. Our results in the quarter, coupled with our confidence in continued recovery throughout the year, enabled us to begin returning capital to shareholders earlier than we had anticipated,” said President and CEO Christopher J. Nassetta.
“Our team members worked hard to effectively navigate the pandemic and position the company for the future, and we are excited for the growth opportunities that lie ahead," he added.
In light of these solid results, and the return of share buybacks, we see the insider buying here as a bullish indicator.