If a CEO is buying company stock, it’s often worth investigating the stock further. CEOs tend to have an intimate understanding of their businesses and are usually way ahead of analysts and portfolio managers when it comes to revenue and earnings trends.
Here, we are going to highlight an insider purchase by the President/CEO at Joann Inc (JOAN:US). Joann is an American specialty retailer of crafts and fabrics. It has a little under 1,000 stores throughout the United States. It’s traded on the Nasdaq Stock Exchange and currently has a market capitalization of $411 million.
Joann Inc: Insider Buying
Our data shows that on December 7, the President/CEO at Joann, Wade Miquelon, purchased 55,000 JOAN shares at a price of $9.33 per share. This cost the insider around $500,000 and increased his holding by just over 50%.
CEO Ups Holding Significantly
This trade caught our attention for two main reasons.
The first reason is that the CEO has increased his holding by over 50%. This would suggest that he is extremely bullish on the prospects of the business going forward.
Secondly, Miquelon is a very experienced CEO. Previously, he spent 16 years at Proctor & Gamble and rose to become General Manager and Head of Finance for Western Europe. Afterwards he took on the role of CFO at Tyson Foods and then became CFO at Walgreens. While at Walgreens Mr. Miquelon was involved in the huge two-step transaction to acquire/merge with Alliance Boots. He joined Joann in 2016 and before becoming CEO in 2019 he was the CFO.
Joann announced an exciting joint venture with Singer in early December that will revolutionize the sewing pattern process.
Starting in 2022, the joint venture will launch products with patented technology that will make the sewing process easier with patterns accessible anywhere at any moment. Joann’s stores will be used to sell the new products and services and Singer’s dealer network will also be utilized which extends to 180 countries outside of the United States. The new product has been tested on novice and professional sewers and has suggested there is exciting potential demand from a wide array of potential clients.
“For more than a century, crafters and sewers have largely endured the same arduous process that their ancestors used to make apparel, quilts, craft projects, décor and more. The technologies we are developing turn the most painful part of this journey into the most fun. Imagine instant access to thousands of established patterns, plus literally millions of potential self-designed variations, which can then be projected and cut quickly and accurately,” said Mr. Miquelon.
Having read through the joint venture announcement, we believe that the recent insider buying is bullish. In picking up a large amount of stock shortly after the announcement of the new venture, Mr. Miquelon is signalling that he believes it has the potential to re-rate the shares, which have struggled to gain momentum throughout the last year.