Regis: 4 Different Insiders Have Purchased Shares This Year

Feb. 5.14 | About: Regis Corporation (RGS)

In this article, I will feature one services sector stock that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.
  2. The stock is sold by no insiders in the month of intensive purchasing.
  3. At least two purchasers increased their holdings by more than 10%.

Regis Corporation (NYSE:RGS) owns, operates, and franchises hairstyling and hair care salons for men, women, and children in the United States, Canada, Puerto Rico, and the United Kingdom.

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Insider buying during the last 30 days

Here is a table of Regis' insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Purchased Current Ownership Increase In Shares
David Williams Director Jan 30 5,000 23,433 shares +27.1%
Daniel Beltzman Director Jan 29-31 1,502,507 9,996,589 shares +17.7%
Stephen Watson Director Jan 30 2,000 47,566 shares +4.4%
Daniel Hanrahan CEO Jan 29 20,000 221,839 shares +9.9%
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There have been 1,529,507 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Regis' insider-trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
January 2014 1,529,507 0
December 2013 0 0
November 2013 0 0
October 2013 0 0
September 2013 0 0
August 2013 0 0
July 2013 0 0
June 2013 0 0
May 2013 0 0
April 2013 0 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 1,529,507 shares purchased, and there have been zero shares sold by insiders since January 2013. The month of January 2014 has seen all of the insider buying.

Financials

Regis reported the fiscal 2014 second-quarter, which ended December 31, financial results on January 27 with the following highlights:

Revenue $468.4 million
GAAP net loss $110.0 million
Cash $339.4 million
Debt $294.2 million
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The stock plunged after these results, and the insiders started buying only after these results.

Competition

Regis' competitors include Ulta Salon, Cosmetics & Fragrance (NASDAQ:ULTA). Here is a table comparing these two companies.

Company RGS ULTA
Market Cap: 711.39M 5.36B
Employees: 50,000 5,600
Qtrly Rev Growth (yoy): -0.08 0.22
Revenue: 1.94B 2.56B
Gross Margin: 0.34 0.35
EBITDA: 90.47M 418.19M
Operating Margin: 0.01 0.12
Net Income: -124.47M 196.70M
EPS: -1.90 3.05
P/E: N/A 27.26
PEG (5 yr expected): N/A 1.25
P/S: 0.36 2.15
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Regis is trading at a lower P/S ratio than its competitor.

Here is a table of Ulta's insider-trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
January 2014 0 0
December 2013 0 0
November 2013 0 0
October 2013 0 0
September 2013 0 44,188
August 2013 0 0
July 2013 0 0
June 2013 0 9,659
May 2013 0 0
April 2013 0 0
March 2013 10,000 70,000
February 2013 0 0
January 2013 0 0
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In Ulta, there have been 10,000 shares purchased, and there have been 123,847 shares sold by insiders since January 2013. Only Regis has seen intensive insider buying during the last 30 days.

Conclusion

There have been four different insiders buying Regis, and there have not been any insiders selling Regis during the last 30 days. Two of these four insiders increased their holdings by more than 10%. Regis has a book value of $13.16 per share.

Regis has an $11 price target from the Point and Figure chart. I would be looking to be a buyer around $11 based on the intensive insider buying.

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Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in RGS over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.