Insiders tend to be value investors. If they’re buying company stock, it’s usually because they believe the stock is undervalued.
In this report, we are going to highlight some interesting insider buying at Thor Industries Inc (THO:US). Thor Industries is a leading American manufacturer of towable and motorized recreational vehicles (RVs). Founded in 1980, the company has grown to become the largest manufacturer of RVs in the world, generating sales of $12.3 billion in fiscal 2021. It’s listed on the New York Stock Exchange and currently has a market capitalization of $5.8 billion.
Thor Industries Inc: Insider Buying
Our data shows that there have been two significant insider purchases at Thor Industries over the last month or so.
On December 10, Chairman Emeritus Peter Orthwein bought 10,000 shares at a price of $103.41 per share. This trade cost the insider just over $1.0 million and increased his holding to 84,783 shares.
More recently, on January 4, Chairman Andrew Graves bought 2,000 shares at a price of $104.74 per share. This trade cost the insider about $210,000 and increased his holding to 18,855 shares.
What stands out about this trading activity is the fact that two top-level insiders have purchased stock.
Mr. Orthwein founded the company in 1980 and has served as a director since its inception. Since founding the company, he has held a number of key roles including Chairman, Vice Chairman, and Treasurer. Meanwhile, Mr. Graves has served as Chairman since August 2019 and has been a director of the company since 2010. Both insiders are likely to know the company very well.
Additionally, the insiders have spent a substantial amount of money on stock. Our data shows that their trades represent the largest amount of insider buying at Thor within a quarter for several years.
Good Q1 Results
Thor Industries posted a good set of Q1 fiscal 2022 results in December.
For the period, net sales amounted to a record $3.96 billion, up 56% year on year. Meanwhile, earnings per share for the period came in at $4.34, up 112% year on year. These figures were well ahead of analysts’ estimates. At the end of the period, the group had an RV backlog of $18.1 billion, an increase of more than 100% over the backlog at the end of October 2020.
"Building on our record-setting fiscal 2021, Thor delivered yet another quarter of strong financial results to begin our 2022 fiscal year. It seems the market focuses on the supply chain and labor challenges that our industry is facing right now more than it does our performance in the face of those challenges, but our performance has been consistent despite those challenges," commented President and CEO Bob Martin.
Since the Q1 results, Thor has announced a $250 million share buyback program. “We believe there is a material misalignment between our value and our stock price. Given our favorable outlook on the industry and in our business, there is no better investment opportunity for Thor than its own shares at the current market price,” wrote the company in the buyback announcement.
In light of these strong results, and the share buyback program, we see the insider buying here as a bullish indicator. The buying activity suggests that those within the company believe the stock is undervalued at present.