Top-level insiders such as C-suite executives tend to have a good understanding of their companies’ prospects. If they’re buying company stock, it’s a sign that they’re confident about the future and that they expect the share price to rise.
In this report, we are going to highlight a large C-suite stock purchase at Planet Fitness Inc (PLNT:US). Planet Fitness is a franchisor and operator of fitness centers in the US. Across the country, it has around 2,500 gyms. The company is listed on the New York Stock Exchange and currently has a market capitalization of approximately $6.06 billion.
Insider Buying at Planet Fitness
Our insider transaction data shows that on June 5, CEO Christopher Rondeau purchased 10,000 PLNT shares via his CJR Revocable Trust at a price of $64.99 per share. This trade cost the insider a total of $649,900 and increased the trust’s holding to 36,305 shares.
There are unlikely to be many people who have a better understanding of this business than Mr. Rondeau. He joined the company all the way back in 1993, originally working the front desk at the very first location in Dover, New Hampshire. In 2003, he was appointed COO and then in 2013, he was appointed CEO. Under his leadership, the company has experienced tremendous growth.
What’s interesting here is that Mr. Rondeau has increased the size of his holding by 38%. This suggests that he sees a lot of value in the stock at present.
Share Price Fall
Planet Fitness shares recently took a big hit after Q1 results missed estimates.
For the first quarter, the company posted adjusted earnings per share (EPS) of 41 cents on revenue of $222.2 million. However, analysts had been expecting EPS of 46 cents and revenue of $238.3 million. The company blamed higher costs for the below-par earnings.
The results weren’t terrible, however. Total revenue was still up 19.0% year on year. Meanwhile, total members came in at 18.1 million, up from 17.0 million at the end 2022, reflecting the company's highest quarterly net member growth since the first quarter of 2020.
Looking ahead, management was confident that the group can overcome cost pressures. "As long as we have strong demand, we can overcome external pressures," said Mr. Rondeau.
In light of this confidence from management, we see the insider buying here as a bullish development.