Hill Path Capital Partners, a major holder of Dave & Busters Entertainment (PLAY), recently added 535,000 shares. The buy increased the fund’s holdings by 9 percent, and came to a total cost just over $17.9 million.
That’s on top of a 353,500 share buy made by the fund earlier in the month. That came to a $12.1 million buy that increased the fund’s position by 6 percent. Company insiders have generally been buyers this year, with the last sale occurring in May.
Overall, company insiders own 2.7 percent of the company, and institutions own most of the remaining shares.
The entertainment venue has seen shares drop about 15 percent in the past year, returning just slightly better than the overall stock market. Revenues have jumped 51 percent this year, but earnings have slid.
Overall, that’s taken the company’s valuation from 73 times earnings to 13 times earnings. And shares now trade at just under 1x book value compared to 2x last year.
Action to take: The company could be a solid winner when the market stops falling. The company’s relatively high debt could be leading to some market fear which could change in time. Patient investors can likely acquire shares under $30, should the stock re-test its 52-week lows.
For traders, shares have been somewhat range-bound, and could pop higher before moving to retest he lows. The April $35 calls are an at-the-money trade. Last going for about $4.15, they could deliver mid-double-digit results in the coming weeks, but watch out for a potential swing lower in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.