B. Riley Financial (RILY), a major holder of Lazydays Holdings (LAZY), recently added 191,203 shares. The buy increased the fund’s stake by nearly 11 percent, and came to a total cost of just under $2.48 million.
This follows up on a 19,950 share buy from the fund in late September. And the fund has been a regular buyer of shares going back earlier in the year. Company executives have largely been sellers of shares, when the stock was trading at a far higher price.
Overall, insiders own about 12 percent of the company, with institutions like B. Riley owning most of the remaining float.
The RV dealership chain has seen shares drop 40 percent in the past year on fears of a slowing economy. That hasn’t hit the company yet operationally, with earnings up 25 percent over the past year and revenue up 16 percent. However, rising interest rates and gas prices are likely to eat into the company’s profitability going forward.
Action to take: The big drop in shares has sent the stock to 3 times earnings, and trading at about three-fifths of its book value. That points to a value investment for patient buyers today. The stock does not pay a dividend.
For traders, shares have been in a downtrend over the past year with a few big waves higher. Shares are likely to form a wave in the coming months. The March 2023 $15 calls, last going for a bid/ask spread of about $2.60, could deliver mid-to-high double-digit gains from here.
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.