Insiders Like These Stocks After Earnings Disappointments

Moving on, Scott S Cowen, an Independent Director at Barnes & Noble, Inc. (NYSE:BKS), purchased 5,000 shares of the company on September 15 at a weighted average price of $13.08 per share. Following this transaction, Mr. Cowen now owns 17,895 shares. Although they had already lost some ground after its college bookstore business was spun-off, shares of Barnes & Noble, Inc. (NYSE:BKS) have dropped even more significantly since then, partially on back of the disappointing numbers the company posted for its fiscal 2016 first quarter on September 9. Barnes & Noble declared a $0.68 per share loss on revenue $1.22 billion, compared to analysts’ estimate of EPS of $0.12 on revenue of $999.25 million. Prior to the results, on September 4 analysts at Stifel Nicolaus had reiterated their ‘Hold’ rating on the stock. David Abrams‘ Abrams Capital Management was the largest shareholder of the company (prior to the spin-off) among the hedge funds we track at the end of June, owning almost 5.12 million shares.

Finally, let’s take a look at the insider buying at fashion and lifestyle company Cherokee Inc (NASDAQ:CHKE). Jess M Ravich, an Independent Director at the company, acquired 17,877 shares in multiple transactions at prices ranging between $14.70 and $15.50 on September 16. Accounting for these transactions, his total stake in the company now stands at 225,616 shares. Similar to the two companies mentioned earlier, Cherokee Inc (NASDAQ:CHKE)’s stock also had a major fall after it reported its latest quarterly results on September 11. However, the magnitude of the fall, at almost 40%, was quite large when compared to the above-mentioned companies. Though the EPS of $0.22 on revenue of $8.50 million that the company reported for the quarter missed analysts’ consensus estimate of EPS of $0.24 on revenue of $8.62 million only slightly, the major reason its stock took such a harsh beating was the company’s announcement that Target Corporation won’t be renewing its U.S. license after it expires in January 2017. Mark N. Diker‘s Diker Management probably anticipated a move like this, which is perhaps why the fund reduced its stake in Cherokee Inc (NASDAQ:CHKE) by 63% to 8,683 shares during the April-June period.

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