More Insider Buying at Ambac Financial Group Inc. (AMBC), Plus Two Other Companies with Interesting Insider Buying Activity

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Ascena Retail Group Inc. (NASDAQ:ASNA) has seen four different insiders purchase shares thus far in 2016, so let’s take a look at the most recent insider buying activity. In a Form 4 filing submitted with the SEC on Thursday, Director Katie J. Bayne reported purchasing 4,000 shares on Wednesday at a price of $10.12 per share. Following the recent purchase, the Director currently owns 6,696 shares. Catherine E. Buggeln, another member of the company’s Board of Directors, purchased 5,000 shares in mid-March at $10.25 apiece, which lifted her ownership to 15,000 shares.

Ascena Retail Group is a specialty retailer of apparel for women and tween girls that acquired ANN Inc., a retailer of women’s apparel, shoes and accessories sold under the Ann Taylor and LOFT brands, in August 2015. The company operates more than 4,900 stores across the United States, Canada and Puerto Rico. ANN Inc. was acquired for a total consideration of $2.1 billion, which consisted of $1.75 billion in cash and the issuance of 31.2 million shares of Ascena common stock. It is important to note that the cash portion of the deal was funded with borrowings under a $1.8 billion seven-year, variable-rate term loan. Let’s now take a look at the impact of the freshly-made acquisition on the company’s overall performance. Ascena Retail Group’s net sales for the six months that ended January 23 totaled $3.51 billion, which increased $1.03 billion or 41.5% year-on-year. Expectedly, the increase was mainly driven by the acquisition of ANN in August 2015. Comparable sales from the company’s legacy Ascena brands decreased $110.4 million or 5% year-on-year to $2.20 billion. This decline was mainly attributable to lower sales at Justice, which reflect the new, less promotional selling strategy.

The shares of the specialty retailer have declined 34% in the past 52 weeks and are down 3% in 2016 alone. The stock is currently priced around 10.2-times expected earnings, significantly below the forward P/E multiple of 20.7 for the Apparel Retail industry. The number of money managers from our system with stakes in Ascena increased to 26 from 23 during the December quarter; those 26 hedge fund vehicles collected nearly 18% of the company’s total number of outstanding shares. Royce & Associates, founded by Chuck Royce, reported owning 3.18 million shares of Ascena Retail Group Inc. (NASDAQ:ASNA) as of the end of December.

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