Insider Buying

Insider Buying Report: SeaWorld Entertainment Inc (SEAS:US)

SeaWorld Entertainment Inc
(SEAS:US)
12 months:
+128%
Activity:
Bullish
Pattern:
Purchase from director
News:
Q3 results
SeaWorld Entertainment Inc
(SEAS:US)
12 months:
+128%
Activity:
Bullish
Pattern:
Purchase from director
News:
Q3 results

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 interesting insider trade at SeaWorld Entertainment Inc (SEAS:US). Headquartered in Orlando, Florida, SeaWorld owns and operates a portfolio of theme parks and water parks in the United States. The company has a large collection of animals within its parks and takes an active role in animal rescue and rehabilitation. It’s traded on the New York Stock Exchange and currently has a market capitalization of $5.1 billion.

SeaWorld Entertainment Inc: Insider Buying

Our data shows that on November 23, a director at SeaWorld Entertainment, Timothy Hartnett, bought 2,500 SEAS shares at a price of $65.00. This trade cost him just over $160,000 and increased his holding in the company by around 25%.

First Insider Purchase for Over 12 Months

Mr. Hartnett has a background in Private Equity. Previously, he held many senior roles at accountancy firm PriceWaterhouseCoopers where he worked for 25 years up until 2013. As well as being a Partner at PWC, he was a Global Private Equity Leader up until he left the firm. He was then CEO at White Fall Advisors, a consultancy firm offering financial advice before serving as CEO of New Roc Management since 2018. This background means Mr. Hartnett is likely to be adept at valuing companies.

What stands out about this trade is that it is the first insider purchase at SeaWorld Entertainment for well over a year after a number of insider sell orders. It is therefore very interesting that the director, who is a professional investor, has chosen to buy company stock and go against the grain. It’s worth noting that he has spent a sizable amount of money on stock and increased his holding by 25%, which suggests he is confident the shares are undervalued by the market.

Bouncing Back

SeaWorld Entertainment is making a strong recovery having been hit hard by Covid-19.

In the third quarter ending on September 30, revenues recovered to $521.2 million, having fallen to just over $100 million in Q3 2020. Total revenue for the quarter was up 10% on the figure achieved in Q3 2019 before Covid-19 struck. The net income figure of $102.1 million was the second highest Q3 net income figure achieved in the company’s history whilst adjusted EBITDA of $265.3 million was a record figure. Encouragingly, the total revenue per capita figure continued on an upward trend, moving up to $72.13 which was 6.2% higher than the year prior.

“Our record-breaking financial performance through the first nine months of the year is a testament to the resiliency of our business and the relentless efforts and dedication of our ambassadors. While we have made good progress, we continue to believe there are significant additional opportunities to improve our execution and continue to drive meaningful growth in both revenue and Adjusted EBITDA,” said Marc Swanson, Chief Executive Officer of SeaWorld Entertainment.

Having looked at these impressive results, we see the recent insider buying at the company as bullish. It would appear that Mr. Hartnett shares the CEO’s confidence in the outlook for the business and believes the shares have further to run.

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