Insiders Are Frantically Buying Up These Cheap Stocks

Tile Shop Holdings Inc (NASDAQ:TTS)

Insider Buying Frenzy, The Sequel: Three of the company’s Directors (Peter Kamin, Peter Jacullo III, and Todd Krasnow) have executed dozens of trades in recent days that have seen them buy hundreds of thousands of shares, though the bulk of them were bought for trusts that are managed by Kamin and Jacullo III. Those shares are considered to be indirectly owned. Meanwhile, Todd Krasnow purchased 20,000 shares on February 22 at an average price of $5.55.

Q4 Results Decimate Tile Shop Holdings Inc (NASDAQ:TTS): The insider buying surge follows a 35% slump in the stock over the past few days, following the release of sobering fourth-quarter results (warning: may not work to actually sober you up). Revenue of $78.58 million and a $0.05 loss per share both widely missed estimates, while same store sales dropped by 4.9%. Floor & Decor Holdings Inc (NYSE:FND) appears to be one of the prime culprits in the case of the missing Tile Shop sales, as it announced an expected 24.4% same store sales increase for the fourth-quarter in early-January.

Tile Shop Holdings Inc (NASDAQ:TTS) Headed in New Direction: With Tile Shop losing ground to cheaper competitors, the company appears ready to shift its strategy towards the high-end of the tile market, saying its 2017 strategy was flawed and that its pricing strategy may have alienated its Pro customers. The company’s founder, Bob Rucker, has taken over as interim CEO following the resignation of former CEO Chris Homeister in November.

Hedge Fund Ownership of Tile Shop Holdings Inc (NASDAQ:TTS): There was a 46% rise in hedge fund ownership of Tile Shop during Q4, with Peter Muller’s PDT Partners (276,300 shares) and Neil Chriss’ Hutchin Hill Capital (82,800 shares) among the funds opening Tile Shop positions during the quarter.

U.S. Silica Holdings Inc (NYSE:SLCA)

Who Bought Shares: Director Diane Duren (say that five times fast)

How Many Shares Were Bought: 10,000 @ $25.96 average price per share

Date of the Transaction(s): February 26

U.S. Silica Holdings Inc (NYSE:SLCA) Selloff Overdone?: The insider’s purchase came just a few days after shares of U.S. Silica were battered by 20% following the release of the company’s Q4 results, which included guidance for the current quarter being slashed. While Morgan Stanley did trim its price target on the stock to $47 from $52 (still plenty of upside potential), it said the selling was overdone and raised its 2019 EBITDA outlook for the company by over 25% to $590 million.

Hedge Fund Ownership of U.S. Silica Holdings Inc (NYSE:SLCA): 21 hedge funds in our database owned 17.4% of U.S. Silica’s outstanding shares at the end of 2017. Point72 Asset Management, headed by billionaire Steve Cohen, raised its already large stake in the company by 68% to just under 1.6 million shares in the fourth-quarter. Anand Parekh’s Alyeska Investment Group also loaded up on U.S. SIlica shares in Q4, 691,192 of them to be exact.

Disclosure: None