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Summary

  • Three insiders purchased Wet Seal stock within one month.
  • The stock was sold by no insiders in the month of intensive purchasing.
  • Two of these three insiders increased their holdings by more than 10%.

The Wet Seal (NASDAQ:WTSL) operates stores that sell fashionable and contemporary apparel and accessory items for female customers.

(click to enlarge)

Insider buying during the last 30 days

Here is a table of Wet Seal's insider activity during the last 30 days.

NameTitleTrade DateShares PurchasedCurrent OwnershipIncrease In Shares
John GoodmanCEOMarch 2742,016891,540 shares+4.9%
Adam RothsteinDirectorMarch 25-2648,104100,000 shares+92.7%
John MillsDirectorMarch 2625,000142,506 shares+21.3%

There have been 115,120 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Wet Seal's insider activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
March 2014115,1200
February 201400
January 201400
December 201300
November 201300
October 201300
September 201300
August 201323,4800
July 201300
June 20135,0000
May 201300
April 201362,5000
March 201300
February 2013218,2560
January 201300

There have been 424,356 shares purchased, and there have been zero shares sold by insiders since January 2013.

Financials

Wet Seal reported the fiscal 2013 full-year, which ended February 1, financial results on March 20 with the following highlights:

Revenue$530.1 million
Net loss$38.4 million
Cash$46.2 million
Debt$0

The three insiders purchased their shares after these results.

On March 26, Wet Seal closed a $27 million financing.

Outlook

Wet Seal's first-quarter guidance is as follows:

Net loss$0.16-$0.19 per share
Comparable store sales growthnegative mid- to high-teens

Competition

Wet Seal's competitors include American Eagle Outfitters (NYSE:AEO), Bebe Stores (NASDAQ:BEBE), and The Gap, Inc (NYSE:GPS). Here is a table comparing these companies.

CompanyWTSLAEOBEBEGPSIndustry Average (Apparel Stores)
Market Cap:107.22M2.39B489.30M17.98B363.62M
Employees:N/AN/A1,208N/A8.18K
Qtrly Rev Growth (yoy):-0.23-0.07-0.04-0.030.00
Revenue:530.13M3.31B476.16M16.15B987.38M
Gross Margin:0.260.350.320.390.55
EBITDA:-9.33M355.97M-22.67M2.62B79.75M
Operating Margin:-0.040.07-0.090.130.10
Net Income:-38.38M82.98M-84.64M1.28BN/A
EPS:-0.450.43-1.072.740.19
P/E:N/A28.77N/A14.7329.17
PEG (5 yr expected):-0.082.12-1.041.041.04
P/S:0.190.711.011.100.37

Wet Seal has the lowest P/S ratio among these four companies.

Here is a table of these competitors' insider activities this year.

CompanyInsider buying / sharesInsider selling / shares
AEO506,700341,352
BEBE00
GPS0430,862

Only Wet Seal has seen intensive insider buying during the last 30 days.

Conclusion

There have been three different insiders buying Wet Seal, and there have not been any insiders selling Wet Seal during the last 30 days. Two of these three insiders increased their holdings by more than 10%. Wet Seal has an insider ownership of 3.01%.

The three insiders purchased their shares at prices ranging from $1.15 to $1.19. I believe Wet Seal could be a good pick below $1.19 based on the intensive insider buying.

Disclosure: I am long WTSL. 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.

Source: The Wet Seal: 3 Different Insiders Have Purchased Shares This Month