Chewy shipping boxes
Daniel Acker/Bloomberg
Chewy stock has been in the doghouse lately, but director James A. Star bought up shares of the online retailer of food, medications, and other products for pets.
Chewy (ticker: CHWY) stock tumbled 34% in 2021, compared with a gain of 10.3% in the ProShares Pet Care ETF (PAWZ), of which Chewy is a component. The S&P 500 index fetched more than the shares and the ETF in 2021, rising 26.9%.
Chewy’s fiscal third quarter, reported in December, missed estimates, and the company lowered guidance. The previous quarter had also disappointed. Some analysts are worried Chewy stock has lost its bite.
Director Star unleashed a small buying spree, paying $1.8 million over Dec. 20 and 21 for a total of 32,278 shares, a per-share average price of $55.58. According to a form he filed with the Securities and Exchange Commission, Star now owns 74,822 Chewy shares in a personal account, and another 1,624 restricted stock units.Chewy didn’t respond to a request to make Star, executive chairman of investment firm Longview Asset Management, available for comment. He last purchased Chewy stock on the open market over Sept. 30 and Oct. 1 in 2019, when he paid $1 million for 41,521 shares, a per-share average price of $23.94.
Guggenheim analyst Steven Forbes threw Chewy a bone after the latest quarterly report by reiterating a Buy rating. But he cut his target price to $75 from $90, citing “a more elongated margin walk.” Forbes wrote in a research report that “given our belief that the majority of these cost pressures will prove transient over the long term, we see limited risk behind the path to the high end of management’s gross margin target (25%-28%).”
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
