Shares of Kohl’s (NYSE:KSS) stock are in focus following three purchases by three separate insiders in the past week. In addition, none of these purchases were enacted through a prearranged 10b5-1 trading plan.
Kohl’s has had a difficult year. Shares of KSS stock have declined by about 40% year-to-date as the company deals with inflation, weakened consumer sentiment and high inventory levels. During Q2, revenue clocked in at $4.09 billion, down 8.1% year-over-year (YOY) but beating the consensus analyst estimate of $3.85 billion. Net income totaled $143 million, down from $382 million a year ago. The net income was equivalent to an adjusted earnings per share (EPS) of $1.11, which beat the analyst estimate of $1.03. Meanwhile, same-store sales fell by 7.7% YOY, while inventory levels rose higher by 48% due to lower sales.
However, the purchases by the three insiders may be a signal that they believe the worst is in the rearview mirror. Let’s get into the details.
Insiders Are Betting on KSS Stock
On Aug. 19, Chairman Peter Boneparth kicked off the insider purchases by acquiring 25,000 shares of KSS at an average price of $30 per share. After the purchase, Boneparth now owns a total of 70,700 shares. Then, on Aug. 23, Director Jonas Prising scooped up 10,000 shares at an average price of $29.66. Prising now owns a total of 60,647 shares. The next day, Director John Schlifske purchased 3,413 shares at an average price of $29.29, bring his total share count to 46,937 shares.
Insiders may sell shares for a variety of reasons, but they only buy for one reason: They believe the price will go up. With that in mind, let’s take a look at who else is invested in Kohl’s success.
Who Else Is Betting on Kohl’s?
Tracking institutional ownership is important, as these large investors provide liquidity and price support for stocks. During Q2, 415 funds disclosed a stake in the retailer, down from 442 funds during Q1. On top of that, the institutional put/call ratio lies at 0.7, up from 0.42 a quarter ago. While the put/call ratio increased, investors still own more call options against the company than put options. Let’s take a look at Kohl’s top five shareholders:
- Vanguard: 12.67 million shares.
- BlackRock (NYSE:BLK): 11.09 million shares.
- T. Rowe Price (NASDAQ:TROW): 7 million shares.
- Macellum Advisors: 6.21 million shares.
- Dimensional Fund Advisors: 4.98 million shares.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.