There are 2 hot markets the insiders are buying, and investors need to know about them. One is an old name for Insidertrades.com readers because it has seen hot insider action all year. The other is a new name to the coverage but is seeing heavy insider action and rising share prices.
The first is Dave & Busters (NASDAQ: PLAY), a company trying to maintain momentum in the face of altered consumer habits and rising inflation and the 2nd is U-Haul (NYSE: UHAL). U-Haul is not a glamorous stock, nor that many attractive qualities other than its near-monopolistic hold over the do-it-yourself moving business, its cash-generating power and value.
Dave & Buster's Rises To The Occasion
After a year of listing, Dave & Buster's is still among the most-bought stocks by insiders. The insiders have made 27 transactions over the past year for a total of 1.25 million shares gained, with the bulk acquired by Hill Path D Fund. Hill Path D Fund’s holdings have risen to 1.29 million shares as of early January 2023, which gives it a 2.4% stake in the business and makes it the single-largest shareholder.
Hill Path D Fund’s interest in the stock is unclear, the company has a website, but there is nothing on it other than the name and an email address for information; none has been offered yet. The remainder of the shares were purchased by a bevy of C-suite executives with total insider holdings at 3.2%, which raises an interesting point.
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The insiders, not including major shareholders, hold about 1% of the stock and the institutions another 99.21% which makes for quite a tightly held issue. The institutions are also buying the stock, having netted shares for the last 4 consecutive quarters and counting.
This is in contrast to the relatively high 12% short interest that has been growing in recent weeks. Based on the insider activity and the price action, there is already a short-covering rally in play, which may take this market up to a new high. Resistance is near the $44 range, and it looks like it could be strong. A move above this range would be bullish, and the analyst may help the market get there.
There hasn’t been any analyst activity since the last earnings report and very little over the past year. This is more telling than it seems because the consensus sentiment is holding steady at a Moderate Buy, and the price target has barely budged. Now, the consensus target is near $50.25, which is about 15% above the recent price action and 13% above the $44 resistance target. Dave & Busters will next report earnings in late March, and it is expected to post a strong winter season.
U-Haul Is Getting In Gear
U-Haul is in a position to benefit from the upcoming economic downturn, but, historically, people tend to downsize during tough times, and that often means renting a storage unit, moving or both. In the case of U-Haul investors, it means steadily rising revenue and earnings and a subsequent rise in share prices.
Trading at only 11X earnings, the stock is also offering value, and the insiders are scooping it up. The insiders, including major shareholders, made 11 transactions last year, and there were no sales. They picked up another 1.325 million shares bringing their holdings up to 42% of the company.
The #1 shareholder is Mark Shoen, the son of the company’s founder. He owns, through personal holdings and his holding company Grove Holdings LP, more than 10% of the stock and growing.
This makes the company a tightly held issue by insiders, but the institutions and analysts are not in this game so there is risk in that regard. The institutions own a meager 8.56%, and no major analysts cover it. Turning to the chart, shares of U-Haul are near the middle of a range and move higher. If the market follows through on this signal, it could be worth about $10 or 15%.
Companies in This Article:
|Company||Current Price||Price Change||Dividend Yield||P/E Ratio||Consensus Rating||Consensus Price Target|
|Dave & Buster's Entertainment (PLAY)||$44.27||-1.0%||N/A||17.71||Moderate Buy||$50.00|