Insider Buying At Hibbett Sports Follows Disappointing Earnings

• Insiders at this athletic specialty store operator scooped up some shares this past week.
• Those purchases followed the release of second-quarter results.
• The share price dropped to a multiyear low following the earnings report.

Conventional wisdom says insiders and 10-percent owners really only buy shares of a company for one reason — they believe the stock price will rise and they want to profit from it. So insider buying can be an encouraging signal for potential investors, particularly in an overpriced market or after disappointing news. Case in point: recent notable buys at Hibbett Sports, Inc. HIBB.

CEO Jeff Rosenthal and Chief Financial Officer Scott Bowman bought a combined total of 5,500 shares of this specialty retailer. The share prices ranged from $11.84 to $11.95, for a total of almost $65,400. Note that a few days earlier, a director also bought 10,000 shares for more than $121,000.

See also: Are Foot Locker And Finish Line's Problems All Nike's Fault?

These transactions are in the wake of the recent second-quarter earnings report, which included a narrower-than-expected net loss, but also lowered guidance. The stock tumbled from a previous close above $11.50 a share to around $9.50 shortly after the report. After dropping to a multiyear low of $9.40, the shares have clawed their way back to reclaim that loss.

Hibbett currently has a market capitalization near $245 million. Short interest is more than 19 percent of the float, and the consensus recommendation of analysts is to hold shares. The stock is down more than 68 percent since the beginning of the year and closed most recently at $11.90, still near the share price of the most recent insider purchases.