Top-level corporate executives have the most up-to-date information on their companies' operations. If these insiders are buying company stock, it’s often worth taking a closer look.
In this report, we are going to highlight an interesting insider purchase at Sally Beauty Holdings Inc (SBH:US). Sally Beauty Holdings is a global distributor and retailer of professional beauty products that operates in the US, the UK, and Europe. Through its Sally Beauty Supply and Beauty Systems Group businesses, the company sells and distributes beauty products in over 5,000 stores. It is listed on the New York Stock Exchange and currently has a market capitalization of $2.1 billion.
Sally Beauty Holdings Inc: Insider Buying
Our insider transaction data shows that on 2 August, President and CEO Christian Brickman bought 10,000 SBH shares. This purchase, which cost the insider approximately $189,000, increased his holding to 471,136 shares.
This trade is worth highlighting for a couple of reasons. Firstly, it’s substantial in size. Our records show that it is the largest insider purchase at Sally Beauty since August 2019. The size of the transaction suggests that Brickman is confident the stock is set to move higher.
Secondly, Brickman has made a number of well-timed trades in the recent past. In November 2020, for example, he picked up 11,350 shares at a price of $10.94 per share. Since then, the stock has climbed to $18.70.
It’s worth noting that Brickman has considerable company and industry experience. At Sally Beauty Holdings, he has held the role of President and CEO since 2015. Prior to joining Sally Beauty, he served as President of Kimberly-Clark International. Earlier in his career, Brickman was a Principal in McKinsey & Company’s Dallas, Texas office.
Strong Q3 Results
Sally Beauty Holdings recently posted a very strong set of third-quarter results. For the three months ended 30 June, consolidated net sales amounted to $1.02 billion, an increase of 45% year on year, with sales boosted by improving consumer confidence and the easing of Covid-19 restrictions. Meanwhile, adjusted diluted net earnings per share came in at $0.68, up 718% year on year. The company advised that it had a strong liquidity position at the end of the quarter with cash and cash equivalents of $270 million.
“We are pleased to report another strong quarter, which was driven by strengthening consumer demand and solid execution by our teams,” commented Mr. Brickman.
Looking ahead, the group was optimistic about its prospects. “As we enter 2022, we will continue to scale and optimize a full suite of omni-channel services designed to delight our customers. We believe that with the significant investments we have made in the business and the talented team we have assembled, the company is well positioned to achieve long-term growth,” said Mr. Brickman.
It’s worth noting that in June, two brokers upgraded Sally Beauty Holdings stock. Cowen upgraded SBH to ‘outperform’ with a price target of $30, while Oppenheimer also upgraded the stock to ‘outperform’ with a price target of $24.
In light of these developments, we see the insider buying here as a bullish indicator.