12-month performance: -11% Insider activity: Bullish Insider buying pattern: Large purchases from CEO Recent news: Disappointing Q2 results
Corporate executives have the most up-to-date information on their companies' operations. Their trading activity can tell us a lot about a stock’s future potential.
In this article, we are going to highlight some interesting insider buying at Red Rock Resorts Inc (RRR:US). Red Rock Resorts is a leading US gaming, development, and management company that operates over 20 strategically-located casino and entertainment properties. The company is listed on the NASDAQ Global Select Market and currently has a market capitalisation of $2.1 billion.
Insider buying: large CEO purchases
The insider transaction activity that looks interesting here is a series of purchases from Chairman and CEO Frank Fertitta III. Form 4 filings show that the insider – who has served as CEO since 2011 – made 11 purchases between 6 August and 21 August, spending a total of $37 million on Red Rock Resorts stock.
Source: 2iQ Reearch
Strong short-term IQ
This insider buying stands out to us for a number of reasons. Firstly, Fertitta has spent a substantial amount of money on stock. His purchases represent the largest amount of insider buying within a quarter at Red Rock Resorts for a number of years.
Secondly, Fertitta has a strong short-term trading IQ of 111. This tells us that his previous purchases have been timed well in the short term.
Red Rock Resorts has been impacted severely by Covid-19. For the second quarter, net revenues were $108.5 million, a decrease of 77.5% on the same period last year. However, the operating environment appears to be improving. Recently, the company advised that its Las Vegas properties showed strong performance for the post-reopening period from 4 June through 30 June.
Fertitta’s recent purchases suggest that the insider is confident that business conditions will continue to improve and that the company’s share price will continue to recover after falling significantly earlier in the year.
Given Fertitta’s industry experience, and the size of his recent purchases, we see this insider buying as a bullish signal.
Disclaimer: Neither 2iQ Research GmbH nor its content providers are responsible for any damages or losses arising from any use of this information.
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