Forager Fund, LP, a major holder of Mastercraft Boat Holdings (MCFT), recently bought over 55,000 shares across two transactions, paying just under $1 million to increase their holdings by 4%.
Going further back, another major holder has been buyers of shares last year. And the company CEO bought 5,000 shares in March, increasing his position by 6%. There has only been one insider sale over the past two years from a company director.
Overall, Mastercraft insiders own 3.9% of shares, and institutional investors like Forager Fund own nearly the rest of the float.
The boat manufacturer is down 20% over the past year. Relatively high interest rates for financing and now increased concerns about an economic slowdown have weighed on shares.
That struggle can be seen with a the 30% decline in revenues, and with earnings growth getting slashed in half.
Action to take: Following the dive in shares, Mastercraft now trades at 13 times forward earnings. Even better, there’s no debt on the balance sheet, and nearly $3 per share in cash. That makes shares particularly attractive for value investors.
If economic fears ease, shares could be poised for a bounce from here, which also makes the stock attractive for speculative investors.
For traders, options are limited, so trade accordingly. The October $17.50 calls, last trading for about $2.30, could see mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.