The Federal Open Market Committee is set to release its policy statement at 2 p.m. Thursday in Washington, which will disclose if there is to be a rate hike this week. Simultaneously, the Fed will release its quarterly economic projections as well, while Janet Yellen, the Fed’s chair, is scheduled to hold a press conference at 2.30 p.m. Today’s events will surely shed some light on the future course of the U.S economy and its underlying “true” strength. It appears that financial markets have calmed down since August’s turmoil, caused by concerns about a Chinese economic slowdown; the Dow Jones Industrial Average closed 140.10 points in the green on Wednesday, marking the second consecutive day on an uptrend. The U.S equities markets seem to be recovering and narrowing down the recent losses, while some corporate executives have started to acquire more shares of their companies in anticipation of big things ahead. The Insider Monkey team identified three companies that registered a high volume of insider buying this week, so this article will discuss the reasoning behind the insiders’ moves. These companies include: American Eagle Outfitters (NYSE:AEO), Newport Corp (NASDAQ:NEWP), and Francesca’s Holdings Corp (NASDAQ:FRAN).
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We will start off by examining the insider activity at American Eagle Outfitters (NYSE:AEO), which registered an unusual volume of insider buying on September 14. Jay L. Schottenstein, who serves as Chairman of American Eagle Outfitters, reported buying 500,000 shares at a weighted average price of $15.74 per share. After this recent sizable addition to his position, the executive holds a stake of 3.53 million shares. The apparel retailer’s stock performance has been impacted by the broader market pullback, as its shares have lost nearly 15% over the last one-month period. Rick Snyder, an analyst at Odeon Capital Group, suggests that the stock represents an attractive buying opportunity considering the supposed “denim cycle that’s trending upward”. Therefore, it might be the case that Mr. Schottenstein boosted his stake with the same thought in mind, so this stock is definitely worth investors’ attention at the moment. Chuck Royce’s Royce & Associates holds nearly 4.78 million shares of American Eagle Outfitters (NYSE:AEO), accounting for 0.34% of its portfolio.
Let’s now move on to Newport Corp (NASDAQ:NEWP), a leading global supplier of advanced-technology products and systems. Robert J. Phillippy, who has been President of Newport since July 2004 and Chief Executive Officer since September 2007, purchased 10,000 shares for $14.42 each on Tuesday, lifting his stake to 303,247 shares. It seems that the shares of Newport are close to rock-bottom at the moment, after losing nearly 22% year-to-date. Hence, the executive’s recent acquisition might indicate his confidence in the company’s future growth. Furthermore, Newport used $6.2 million of its $20.5 million in second-quarter cash from operations to repurchase 324,000 shares, which might serve as another indicator that the stock is relatively undervalued at the moment. The company will most likely continue to repurchase shares in the quarters ahead, as there are 2.7 million shares available for repurchase under the previously-authorized program by its board of directors. Ken Griffin’s Citadel Investment Group initiated a position in Newport Corp (NASDAQ:NEWP) during the second quarter, consisting of 49,978 shares.
Finally, we will take a look at the insider buying activity at Francesca’s Holdings Corp (NASDAQ:FRAN), which had two different insiders buy shares this week. Michael W. Barnes, who is the Chairman, President, and CEO of the company, acquired a 26,000 share-stake at a price of $11.66 per share. Similarly, one of the company’s directors, Martyn R. Redgrave, purchased a smaller stake comprised of 21,000 shares for $11.88 apiece. Unquestionably, the executives’ message to the market is that the stock is seriously undervalued at the moment, following a year-to-date drop of over 28%. Earlier this month, Francesca’s Holdings posted net sales of $106.0 million for its fiscal second quarter of 2016 that ended August 1, compared with $97.3 million reported a year ago. The sales growth is mainly attributed to the 82 new boutique openings over the past one-year period. Moreover, the company’s income from operations came to $15.2 million, down from $16.7 million reported last year. Mariko Gordon’s Daruma Asset Management is the largest equity holder of Francesca’s Holdings Corp (NASDAQ:FRAN) within our database, owning 3.89 million shares.
Disclosure: None
