A Form 4 lodged with the SEC on Friday afternoon indicated online outdoor products retailer Solo Brands (US:DTC) Chief Financial Officer, Somer Webb was once again buying shares in the company. The transaction was first spotted on Fintel’s insider trading tracker over the weekend.
In the filing, Webb disclosed the purchase of an additional 45,000 shares on Thursday at an average price of $4.10, equating to a total trade value of $184,500.
The transaction increased Webb’s total shareholding by about ~60% to 115,372 shares.
The last time Somer Webb purchased shares in the company was back in late May, which Fintel analysts reported on – here. Webb’s latest purchase at $4.10 per share comes at a ~53% discount to the previous accumulation of at $8.65 per share.
Solo Brands share price weakness has continued over the course of 2022, with the stock now trading 74% lower to date.
The company now has a market capitalization of slightly below $400 million and the valuation that has remained relatively stable since mid-May 2022. The last three months has seen the stock trade in a $4 to $6 share price range, fluctuating higher and lower on incremental stock news.
Fintels insider accumulation score of 84.57 is bullish on the stock, ranking the company in the top 3% when compared to 14,536 other stocks around the world. In addition to this, the firm’s officer accumulation score of 92.67 is even higher, placing the company in the top 0.5% of 11,460 screened companies based on the highest level of officer buying.
Solo Brands has had 2 net insiders that have purchased shares in the company in the last 90 days.
The second insider, seen purchasing stock, was the firm’s CEO, John Merris, who accumulated a little under 2,500 shares in two transactions over June in his Son’s trading account. The average price across the two transactions were $4.43 per share for a total value of $11,000.
Merris indirectly and directly owns ~120,000 shares of stock following the transaction.
Despite the weak share price performance, the company continues to track well financially against market expectations.
At the most recent second quarter earnings result in early August, Solo Brands reported adjusted earnings per share of 40 cents which came in ~38% ahead of analysts 29 cent per share forecast. The firm’s earnings also doubled from the 19 cents per share earned in the first quarter of the financial year.
DTC’s second quarter revenue showed continued strength, with $136 million generated against the streets’ expectation of around $125 million and the previous year’s comparison of $89 million.
The disappointment from the result came from management guiding full year revenue growth in the mid 20% range on FY21, compared to the market which was looking for a little over 35%.
DTC’s share price rallied in the month lead-up to the result but failed to sustain ground with the stock erasing the recent gains and more in the weeks following. DTC is now trading 33% lower since the release of the second quarter financials.
Since the results release, investment bank William Blair held investor meetings with Solo Brands management to discuss the outlook for the company. During the meetings, DTC’s management reaffirmed expectations that they could continue to drive profitable, double-digit revenue growth over the long term as they continue to deliver strong operational leverage and as customer acquisition and logistics costs begin to normalize.
On average, sell-side institutions remain ‘buy’ rated on the stock with an average target price of $9.70 which suggests 40% capital upside remains in the stock. However, we note that the consensus price target has substantially fallen over time, following share price movements.
This article originally appeared on Fintel
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