Insider Buying: The CEO Calavo Growers Just Bought $2.3 Mil Worth of Stock

Insider transactions can give investors a more complete view of activity within the world’s publicly-listed companies. No one has more information in relation to a company’s prospects than its leaders.

In this report, we are going to highlight some large insider stock purchases at Calavo Growers Inc (CVGW:US). Calavo Growers is an international consumer goods and farm products company that distributes avocados, fruit, and fresh prepared food to restaurants, stores, and individual customers worldwide. It is listed on the Nasdaq and currently has a market cap of around $678.8 million.

Large CEO Purchases

Our data shows that between July 12 and July 13, Calavo’s President/CEO Lee Cole purchased 75,000 shares at an average price of $30.34 per share. This trading activity cost the insider around $2.3 million. Following that on July 14, Chairman Steve Hollister also made a notable trade, purchasing 2,000 shares at a price of $30.59 per share, which amounted to $61,180.

Company Knowledge

There are unlikely to be many people who have a better understanding of this business than Mr. Cole. Previously, he served as Calavo’s President and CEO from 1999 until his retirement in January 2020 (he was reappointed as President and CEO in March this year). Meanwhile, he served as a director of the company for 39 years (28 as Chairman of the Board). These large stock purchases from the insider are therefore notable.

A Confident CEO

Calavo Growers has faced some challenges recently. This is illustrated by the fact that revenue in Q2 was down 26% year on year. Net loss for the quarter was $4.0 million versus $0.2 million a year earlier.

However, Mr. Cole clearly believes he can turn things around.

“I am excited to be back at Calavo, a company that I helped to build and lead as CEO for 20 years and as Chairman for 28 years,” he said in the Q2 results. “I am back because I believe in the long-term earnings potential of this company, and I am confident that our team under my leadership can restore Calavo’s profitability,” he added.

Mr. Cole went on to say that his primary focus since returning to the company has been the avocado business, and he is pleased with the progress the group is making. In Q2, avocado volume was up 11% compared to the prior year quarter with avocado margins improving from the first quarter.

“With the improvements we’re making to the business, I’m optimistic about the second half of the year and feel confident that we’re putting Calavo back on track for long-term success,” he commented.

In light of this confidence from the CEO, we see the insider buying activity as a bullish development.