Jumana Capital Investments LLC, a major holder of Red Robin Gourmet Burgers (RRGB), recently bought 37,761 shares. The buy increased the fund’s position by 5%, and came to a total cost of $218,595.
The buy comes a month after the company CEO bought 10,000 shares, for about $31,526, and after the company CFO also picked up 5,000 shares. Going further back, another major fund was a slight seller of shares, taking about $2.25 million off the table.
Overall, Red Robin insiders own 11% of shares, and institutional investors hold 78% of shares.
The restaurant chain has slid 17% over the past year. Revenues have been flat, and the company has reported losses, as consumers have scaled back on dining out at restaurants. Red Robin is somewhat leveraged as well, carrying about five times as much debt as equity.
However, shares trade at 0.1 times their price-to-sales, suggesting that shares may be undervalued at current prices.
Action to take: Shares hit a 52-week low in September, and have started to trend higher since. The stock likely has more upside in the months ahead, making this a reasonable and inexpensive investment for momentum-based investors.
Given the current uptrend in shares, investors may like a call option trade here. The March 2025 $7.50 calls, last trading for about $1.05, could see mid-to-high double-digit returns depending on how much momentum shares have going into the spring.
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 company mentioned in this article.