Insider buying can provide clues about a stock’s next move. Insiders sell company stock for many reasons. Yet they only buy stock for one reason – they expect it to rise.
Here, we are going to highlight an insider purchase at Oxford Industries Inc (OXM:US). Oxford Industries is an American clothing company that focuses on top-end clothing and apparel under a number of different brands such as Tommy Bahama and Southern Tide. It designs, markets, and distributes its products, selling them via its retail stores and online. The company also sells some products through wholesale distribution channels. As well as selling clothing under the Tommy Bahama brand, Oxford Industries has 20 Tommy Bahama food and beverage outlets. The company is traded on the New York Stock Exchange and currently has a market capitalization of $1.65 billion.
Oxford Industries Inc: Insider Buying
Our data shows that on January 3, an Independent Director at Oxford Industries, John Holder, purchased 2,500 OXM shares at a price of $99.58 per share. This purchase cost the insider around $250,000 and increased his holding by just under 10%.
Strong Trading History
This trade is interesting for a couple of reasons.
First of all, Mr. Holder is an extremely accomplished businessman. He has been CEO of Holder Properties for over thirty years and during his tenure the company has developed over 100 commercial properties valued in excess of $2.5 billion. As well as being an Independent Director at Oxford Industries he is also on the Audit Committee and is an Independent Director at Genuine Parts Company.
Secondly, Mr. Holder has proved adept at picking his trading levels in the past. The company’s share price has more than doubled since the Independent Director last bought stock in the third quarter of 2020. This purchase is the first time an insider has picked up stock for close to a year and a half and it suggests the experienced insider believes the momentum in the share price will continue.
Full-year Guidance Raised
Oxford Industries had a strong Q3 which led to record net sales and earnings. Given the record results, guidance for the full year was revised upwards.
Consolidated net sales of $248 million were ahead of the $241 million achieved in Q3 2019 before the pandemic hit. This was impressive as it was achieved despite significantly lower sales at Lanier Apparel which the company effectively exited during the quarter. Earnings on a GAAP basis rose to $1.54 per share against $0.10 posted in the third quarter of 2019 and a loss last year. At the end of the period, the balance sheet was very healthy with $188 million of cash and short-term investments and no outstanding debt on the group’s revolving credit facility.
Looking ahead, the company said it expects EPS in Q4 to come in between $1.20 and $1.35 on a GAAP basis versus the $0.90 achieved in Q4 2019.
“While the current operating environment has presented challenges including supply chain disruptions and additional cost pressures, we are managing them adeptly and I am confident in our ability to continue successfully executing our key strategies as we move through the fourth quarter and into fiscal 2022. I am pleased to report that holiday selling to date has been robust and I firmly believe that we will deliver a strong finish to a fantastic year. I am incredibly grateful to our team and share their pride in what we have delivered for our customers and our shareholders,” said Thomas C. Chubb III, Chairman and CEO.
On the back of these knock-out Q3 results which saw guidance raised and a very positive outlook statement, we see the recent insider trading at Oxford Industries as bullish. It suggests that Mr. Holder has taken a view that the business will continue to grow and that the share price will continue to move upwards as it does.