Insiders Are Going Shopping at Francesca’s

Page 1 of 2

Our database of insider trading filings shows three insiders at Francesca’s Holdings Corp (NASDAQ:FRAN) buying the stock on December 12th at prices generally between $23.20 and $23.60. CEO John Merritt bought 10,000 shares, an executive vice president bought about 4,200 shares, and Neill Davis, the company’s president, purchased 3,000 shares. The stock had already seen a round of insider buying in September (see a history of insider purchases at Francesca’s). Francesca’s is a specialty retailer with a market capitalization of just over $1 billion, selling women’s clothing, jewelry, and accessories.

Studies show that, statistically, stocks bought by insiders tend to outperform the market (find out more about studies on insider trading). We think that this is partly because insiders will normally avoid buying a stock- after all, their financial situation is already tied to the company’s prospects, and diversification is rational. The exception would be if there is a good deal of confidence in the stock. Stocks seeing consensus insider purchases, it turns out, are particularly good performers on average. As a result we think that it’s a good idea to examine Francesca’s Holdings Corp more closely and see if it could be one of these winners.

Ken Griffin CITADEL INVESTMENT GROUP

The company recently filed its 10-Q for the quarter ending in October 2012 (the third of its fiscal year ending January 2013). Revenue grew by 43%, due to both an increase in the number of locations (27% higher than a year ago, with roughly the same percentage increase in total square footage) and significantly higher comp sales and revenue per square foot. Operating and net income more than doubled, bringing earnings per share to 72 cents for the year. That places the stock at 26 times trailing earnings, but we’d expect that net income will be significantly higher in the current quarter than a year ago. Analyst consensus is for 28 cents, which would pull the P/E down to 24. However, that suggests little seasonality as it would only be a small improvement on a q/q basis. The sell-side expects strong growth over the next several years, as despite this high starting point the five-year PEG ratio is 0.8.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!