On Wednesday after market close, American home goods retailer Bed Bath & Beyond (US:BBBY) disclosed the purchase of 50,000 shares by Interim CEO Sue Gove. The transaction was spotted in Fintel's insider trading tracker.
The stock was purchased in one transaction on the first of July at $4.61 per share with a total transaction value of $230,500. Sue Gove now owns a total of 105,587 shares following the transaction.
Sue’s purchase follows weak share price performance with shares trading 80% lower than they were one year ago in July 2021. BBBY has been negatively impacted with slowing group sales coupled with supply chain issues that have deteriorated margins further.
Gove was appointed as Interim CEO on the 29th of June following the departure of CEO, Mark Tritton. The move was announced by Independent Chair Harriet Edelman who noted that the change was focused on reversing recent weak results by addressing supply chain and inventory issues and aiming to strengthen the balance sheet.
Sue has served as an independent director of BBBY since May 2019 and initially purchased 34,000 shares in July 2020 at $7.89. The remaining share balance of the ~105K position is made up of several stock awards as part of the director remuneration package.
The most recent first quarter results that triggered the management changes saw the group post earnings per share of -$2.38 compared to a consensus forecast of about -$1.40. The loss was almost 170% worse than expected by the market. Group revenue also under impressed with $1.46 billion in sales over the quarter compared to a $1.51 billion expectation.
Fintel’s officer accumulation score is bullish with a score of 92.48 and has been boosted by this recent purchase. BBBY’s score is the 37th highest when compared to the 11,422 other companies that have been included in the screen.
The CEO purchase also contributes to the bullish Fintel insider accumulation score of 88.58. BBBY has had a total of 3 net insiders that have purchased stock in the last 90 days.
The other insiders that have been noticed purchasing stock included group Chair Harriet Edelman and board director Jeffrey Kirwan.
Edelman purchased 10,000 shares at $4.94, bringing her total to 73,789.
Kirwan purchased 10,000 shares at $4.90, topping up his position to 43,445.
The table to the right illustrates the purchases and sales over time for the stock. The graph shows the growing levels of accumulation over 2022.
Over the last week, there have been several broker updates in response to the quarterly results.
Analyst Simon Gutman from Morgan Stanley remained bearish on the stock with an ‘underweight’ rating and $2.00 price target. Gutmans thesis is based on the expected continuation of macroeconomic softness, market share losses, coupled with the recent management turnover, which he believes will unlikely lead to improving fundamentals over the next 6 to 12 months.
Michael Lasser from UBS believes new management will need to work quickly to address BBBY’s share losses, to fix supply chain and other issues which may be difficult given the challenging macroeconomic backdrop. UBS continues to have a ‘sell’ recommendation and $5 target post results.
The institutional consensus ‘underweight’ rating is bearish on the stock and the average $3.50 target price suggests 36% further capital downside may exist.
Fintel’s financial analysis page provides some useful insights that help visualise a stock’s valuation and financial metrics. For example, the graph below helps illustrate the diminishing financial ratios that have been closely aligned with the falling share price.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.