CEOs tend to have a deep level of insight into their companies’ operations and performance. So, if these individuals are buying company stock, it can pay to take a closer look.
In this report, we are going to highlight a substantial CEO purchase at Rev Group Inc (REVG:US). Rev is a leading designer, manufacturer, and distributor of specialty vehicles in the US. Serving a range of industries, it offers fire trucks, ambulances, school buses, municipal transit buses, terminal trucks, street sweepers, recreational vehicles, and more. The company is listed on the New York Stock Exchange and currently has a market capitalization of $1.3 billion.
Rev Group: Insider Buying
Our records show that on 29 March, CEO and President Rodney Rushing bought 16,750 REVG shares at a price of $17.98 per share. This purchase cost the insider a total of $301,000.
This transaction is worth highlighting as our data shows that it is the largest insider purchase at Rev Group since September 2019. This suggests that Rushing is confident the stock is undervalued at present.
Additionally, the purchase comes after CFO Mark Skonieczny and another insider purchased stock in mid-January. Our Insider Model views this buying activity as bullish.
Good Q1 Results
Rev Group’s recent first-quarter results were significantly better than Q1 results last year. For the quarter, net sales were $554.0 million compared to $532.1 million in the prior year quarter while adjusted net income was $8.8 million compared to an adjusted net loss of $2.7 million in the prior year quarter. First quarter net cash from operating activities was $1.9 million compared to a net use of $13.3 million in the prior year quarter.
Looking ahead, the group expects performance to continue improving. For the full-year fiscal 2021, it expects adjusted EBITDA of $125 to $135 million, representing an 85% to 100% increase year over year. Backlog and order intake have been strong in fire, emergency, recreation and specialty markets and the company expects its transportation service markets to respond to greater availability and adoption of Covid-19 vaccinations throughout the year.
In light of this outlook, we see the purchase from the CEO as a bullish signal.