On Monday, two small-cap companies at the cyclical consumer goods and services sector saw its insiders acquire their stock: Brown Shoe Company, Inc. (NYSE:BWS) and Flexsteel Industries, Inc.(NASDAQ:FLXS).
Brown Shoe Company, a $1.05 billion market cap footwear retailer and wholesaler, witnessed one purchase in the hands of Lee W Capps, Board Director. Capps started a position in the stock with 1,020 shares, for which he paid $24.90 per share. In addition, the insider holds 2,980 shares indirectly, through an Irrevocable Trust. Moreover, major hedge funds including Jim Simons‘ Renaissance Technologies and Israel Englander‘s Millennium Management also seem to feel bullish about this stock. In fact, Simons more than doubled his stakes in the stock over the last reported quarter and is now the largest institutional shareholder at Brown Shoe Company, holding 859,050 shares. Mr. Englander, also upped his bets, tripling his holdings, to 254,094 shares. Other prominent investors placing bets on this company are Joel Greenblatt and Ken Griffin.
In order to understand the all of the aforementioned bullishness, one must look beyond the company’s weak fundamentals, and into its growth prospects. Analysts expect it to outperform its industry, delivering average annual EPS growth rates around 15% over the next five years. Moreover, a mean price target of $32.50 per share implies a significant upside potential for the shorter-term.
Second in this list is Flexsteel Industries, a $266 million market cap manufacturer, importer and marketer of residential and commercial upholstered and wooden furniture products in the United States. Although only two major funds, Renaissance Technologies and Chuck Royce’s Royce & Associates, hold stakes in this stock, and both have most recently reduced their exposure to it, one insider at the company still seems to find growth potential in it.
Nancy Uridil, Board Director, added, last Monday, 1,705 shares of Common Stock to her holding, which now amount to 7,150 shares. Having reported two separate transactions, the insider paid $36.34 per share for 1,000 of them, and $36.47 per share for the remaining 705 shares. Moreover, in addition to this insider, analysts also seem to like this company. Analysts at Morningstar, Yahoo! Finance and Barrons/The Wall Street Journal are recommending Flexsteel’s stock as a “buy” case.
Disclosure: Javier Hasse holds no postion in any stocks mentioned