Fund 1 Investments LLC, a major holder at Tilly’s Inc (TLYS), recently added 177,930 shares. The buy increased the fund’s holdings by 3 percent, and came to a total cost of $1.36 million.
The fund has been a steady buyer of shares over the past year. The fund also sold shares back in December, possibly for tax loss purposes. There have been a few small sales by company insiders over the past year.
Overall, company insiders own about 2.3 percent of shares, and institutions own nearly the rest of the float.
The apparel retailer is down 15 percent over the past year. The company didn’t have positive earnings in the most recent quarter, and overall revenues have dropped 11 percent over the past four quarters.
Despite that decline, the company has over $110 million in cash, or nearly half of its market cap. As long as Tilly’s can continue to generate cash, it can potentially rebound and move higher.
Action to take: Fashion can be a cyclical business, and consumer spending may start to slow in the months ahead. Given the company’s valuation right now, investors may want to shy away from shares, and look for a turnaround and buying from corporate insiders, not just big fund players.
For traders, the October $5 puts, last going for about $0.20, could fare well if shares continue their long-term trend lower 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 of the companies mentioned in this article.