David Field, CEO of Entercom Communications Corp (NYSE: ETM), stepped up and bought shares of his company this week as his holdings increased nearly 5%. The purchase comes as the price of the stock is staging a short-term rally and comes after the company missed analyst estimates last Friday but saw the share price rise on the session. The purchase comes at a good time technically and looks like this may be a bullish signal for a near-term move in the price.
ETM reported that their Q2 revenue declined 54% compared to the same quarter in 2019. The result was an operating loss of $45.3 million. Recognizing the impact of COVID-19, the company took measures to reduce expenses by 45% for the quarter. The president and CEO, David J. Field, discussed the measures the company has taken:
“In this regard, we implemented a range of company-wide initiatives, which lowered second quarter total cash operating expense by approximately $97 million, which exceeded our budget. In addition, we secured our strong liquidity position through an amendment to our credit facility and ended the second quarter with $208 million of cash, up from $189 million at the end of March.”
The resulting price move following the earnings reflected a positive response to the report. The positive movement comes even as analysts have cut their estimates for the coming fiscal years.
One of the positive coming from this is that the Mr. Field stepped up this past week and purchased 122,075 shares at a trade price of $1.60. The additional shares increased the size of his holdings by 4.7%. The purchase also comes following an even larger purchase from Joseph Field for 1.2 million shares on May 20, 2020.
Action to Take: ETM is a long opportunity with a near-term target of $2.50.