Coliseum Capital Management, a major holder of Purple Innovation Inc (PRPL), has been adding to its stake. The fund bought 120,000 shares on December 28, paying just over $1.6 million for shares. And on December 27, the fund bought 594,478 shares, paying just over $8.1 million.
Those pale in comparison to the 7,541,863 shares bought back on December 20th, coming in at a whopping $85.1 million buy. The fund has also been a seller of shares back in May, at a price 55 percent higher.
Overall, company insiders own just 0.5 percent of company shares. However, with a major holder with a good track record may be a good indicator that shares are a buy now.
Shares of the innovative mattress company are down 56 percent in the past year, as revenue has slid 9 percent.
Action to take: The stock looks oversold and already moving higher in the short term from a technical standpoint. Investors might be able to ride shares higher by the double-digits in the coming months.
For traders, the insider buying may be a sign of a move higher over the next few months. The July $15 calls, last going for about $2.10, are a near-the-money trade most likely to benefit from a rally in shares in the coming months. Traders should look for mid-to-high double-digit gains before taking profits.
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 of the companies mentioned in this article.