If a CEO is buying shares in their own company, it can pay to take a closer look. These insiders have deep insight into the companies’ operations and are way ahead of analysts and portfolio managers when it comes to business trends.
In this report, we are going to highlight a large CEO purchase at Trulieve Cannabis Corp (TCNNF:US). Trulieve is a North American medical cannabis company that operates predominantly in the state of Florida. The company – which operates a vertically-integrated ‘seed-to-sale’ business model – currently has 83 stores in Florida and 87 across the US. It is listed on both the Canadian Securities Exchange and the OTCQX market and has a market capitalization of USD $4.5 billion at present.
Trulieve Cannabis: Insider Buying
Our insider transaction data shows that on 15 June, Trulieve’s CEO Kim Rivers bought 29,000 shares at a price of USD $35.94 per share. This purchase – which cost the insider approximately $1.0 million – increased her holding to 77,920 shares.
This trade stands out for a number of reasons. Firstly, it is large in size. Our records show that it is the largest insider purchase at Trulieve for several years.
Secondly, it has increased the size of Rivers’ position by almost 60%. This is a significant increase which indicates that the insider is very confident the stock is set to move higher.
Third, Rivers has a good track record when it comes to timing her purchases well. Our data shows that she purchased a significant amount of stock in late 2019 at much lower prices.
Overall, our Insider Model views this purchase as very bullish.
Trulieve’s recent first-quarter results were pretty good. For the quarter, the company achieved record quarterly revenues of $193.8 million, a sequential increase of 15% over Q4 2020, while adjusted EBITDA came in at $90.8 million versus $81.4 million in Q4. Net income was $30.1 million, up from $3.0 million in Q4.
During the quarter, the company announced the acquisition of Harvest Health & Recreation Inc, a vertically-integrated cannabis company with operations in a number of states. Upon completion of this transaction – which represents the largest US cannabis deal in history – the combined business will have operations in 11 states.
Looking ahead, management was optimistic about the future. "Our continued strength in our home state of Florida, as well as the build out of our northeast hub, with progress in Pennsylvania, Massachusetts and West Virginia, has generated momentum for an exciting remainder of the year. We expect many positive catalysts in the months ahead, which align well with the current political environment and heightened focus on cannabis in this country," said the Trulieve CEO. "The pending acquisition of Harvest will be transformative and will build on our profitability, expanding our runway for growth," she added.
In light of these results, and the acquisition of Harvest Health & Recreation, we see the insider buying here as bullish.