Christopher Morris, CEO of Dave & Buster’s Entertainment (PLAY), recently bought 14,912 shares. The buy increased his stake by 14%, and came to a total cost of $502,162.
This is the first insider buy since July, when the company CFO bought 13,578 shares, paying just over $526,000 for the position. One company VP sold about half his position last month, and company insiders were generally sellers over the last 12 months.
Overall, Dave & Buster’s insiders own about 1.5% of shares.
The owner and operator of entertainment and dining venues is down 3% over the past year. However, the company has seen its earnings jump 55% over the past year, amid a 3% rise in revenues.
So while overall spending at Dave & Buster’s has been slow, the company has gotten leaner and more efficient.
Shares also now trade at about 8 times forward earnings, and the stock seems to be finding a bottom around current prices.
Action to take: Given the valuation here, as well as shares trading near their 52-week lows, Dave & Buster’s could be a potential rebound play in the months ahead. That could result in double-digit returns for buyers today.
At present, the company does not pay a dividend.
For traders, a potential rally higher in the months ahead bodes well for a trade like the January $35 calls. Last trading for about $2.75, the options could see high double-digit returns if shares catch a year-end rally higher.
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.