CEOs tend to have a deep level of insight into their companies’ operations and performance. If these insiders are buying company stock, it’s generally a sign that business performance is strong and that the outlook for the stock is positive.
In this report, we are going to highlight a large CEO purchase at Monro Inc (MNRO:US). Monro is a leading US auto service and tire provider that owns a number of well-known auto care brands. The company owns 10 brands in total, the majority of which offer complete auto care and servicing at a significant discount to dealers and local repair shops. Monro is listed on the NASDAQ Global Select Market and currently has a market capitalization of $1.97 billion.
Monro Inc: Insider Buying
Our insider transaction data shows that on 30 July, Monro’s President and CEO Michael Broderick bought 5,000 MNRO shares at a price of $59.39 per share. This purchase – which cost the insider $297,000 – increased his holding to 55,000 shares.
The trade from Mr. Broderick looks interesting for a couple of reasons. Firstly, it is substantial in nominal terms. Secondly, it has increased the size of the insider’s position by 10%. The size of the trade suggests that the insider is confident the stock is set to move higher.
It’s worth noting that Mr. Broderick – who assumed the role of President and CEO of Monro in April – has over 25 years of experience in the aftermarket parts and tire service industry. Previously, he served as Executive Vice President of Merchandising and Store Operations Support at Advance Auto Parts, where he was instrumental in driving same-store sales growth and implementing technology-driven strategies to enhance operational efficiency. Before this, he served as Senior Vice President of the automotive division of Canadian Tire Corporation. This background means that he is likely to have a good read on the industry and his company’s prospects.
Record Q1 Sales
In late July, Monro posted a strong set of Q1 results. For the three months ended 26 June, sales were up 38.4% year on year to a record $341.8 million. Meanwhile, net income for the quarter came in at $15.7 million, up from $3.0 million in the same period last year. Adjusted earnings per share amounted to $0.55 versus $0.15 in the Q1 2021. The company advised that the momentum had continued into the second quarter with comparable store sales up approximately 15% in fiscal July.
Looking ahead, management was optimistic about the outlook. “We are excited about the significant opportunities that lie ahead of us,” said Mr. Broderick. “Our proven business model and financial flexibility position us well to capitalize on additional market share opportunities through strategic and value-accretive acquisitions and greenfield expansion to deliver long-term shareholder value,” he added.
In light of strong results and the confidence from the President and CEO, we see the insider purchases here as a bullish indicator