Insider Buying

Insider Buying Report: Hooker Furniture Corp (HOFT:US)

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Hooker Furniture Corp
HOFT:US
12 months:
+79%
Activity:
Bullish
Pattern:
Purchase from board member
News:
Strong Q1 results
Hooker Furniture Corp
HOFT:US
12 months:
+79%
Activity:
Bullish
Pattern:
Purchase from board member
News:
Strong Q1 results

If an insider at a small company is buying company stock, it’s often worth taking a closer look at the stock. Research shows that insiders at small firms tend to earn much larger profits from their purchases of company stock than insiders at large firms.

In this report, we are going to highlight some insider buying at a small US company, Hooker Furniture Corporation (HOFT:US). Hooker Furniture is a designer, marketer, and importer of wooden, metal, leather, and fabric-upholstered furniture. Its furniture, which includes beds, tables, and chairs, is sold by a wide range of retailers including independent furniture stores, department stores, mass merchants, national chains, catalog merchants, interior designers, and e-commerce retailers. The company is listed on the NASDAQ Global Select Market and currently has a market capitalization of $405 million

Hooker Furniture Corp: Insider Buying

Our insider transaction data shows that on 2 July, board member Henry Williamson bought 5,000 HOFT shares at a price of $34.81. This purchase, which cost the insider approximately $174,000, increased the size of his holding by about 11%.

The Largest Purchase Since 2019

This trade is worth highlighting for a couple of reasons. Firstly, it’s large in relative terms. Our data shows that it is the largest insider purchase at Hooker Furniture since early 2019.

Secondly, Mr. Williamson has a good track record when it comes to timing his purchases well. Our model gives the insider a short-term Trading IQ of a high 119. It’s worth noting that Mr. Williamson has served as a director since 2004. So, it’s likely that he knows the company very well.

Record High Q1 Sales and Earnings

In early June, Hooker Furniture posted a strong set of first-quarter results. For the quarter, sales came in at $162.9 million, up 56% on Q1 2020 sales, and up 20% on Q1 2019 sales. Meanwhile, net income came in at $9.4 million, a significant improvement on the net loss of $34.8 million posted in Q1 2020. Both the sales and net income figures represented record-high figures for the company’s fiscal first quarter.

Looking ahead, management was optimistic in relation to the outlook. “While we expect the extraordinary levels of demand for home furnishings to diminish somewhat, we also expect that demand for home furnishings will settle into a higher level of demand than pre-pandemic. We believe our company is strongly positioned to win in this environment,” said CEO Jeremy Hoff. “Several macroeconomic factors provide a nice runway for growth such as the ongoing strong housing market and favorable demographics,” he added.

The company also noted that its consolidated orders and backlogs are “more than double” historical norms heading into the summer months.

In light of these strong results, we see the insider buying here as a bullish indicator.

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