On August 24, 2023, Vojin Todorovic, the Chief Financial Officer of Build-A-Bear Workshop Inc, sold 23,158 shares of the company. This move is part of a series of transactions by the insider over the past year, during which Todorovic has sold a total of 134,025 shares and purchased none.
Build-A-Bear Workshop Inc is a specialty retailer that offers an interactive make-your-own stuffed animal retail-entertainment experience. The company operates in three segments: Direct-to-Consumer, International Franchising, and Commercial. The Direct-to-Consumer segment offers company-owned retail stores in the United States, Canada, the United Kingdom, Ireland, and Denmark. This segment also runs e-commerce sites in the United States, Canada, and the United Kingdom.
The insider's recent sell-off has raised questions about the company's current valuation and future prospects. To better understand this, let's delve into the company's insider trends and valuation metrics.
The insider transaction history for Build-A-Bear Workshop Inc shows a clear trend of insider selling over the past year, with 21 insider sells and no insider buys. This could be a potential red flag for investors as it might indicate that insiders believe the company's stock is overvalued or that the company's future prospects are not as promising as the market believes.
On the day of the insider's recent sell, shares of Build-A-Bear Workshop Inc were trading for $28.5 apiece, giving the company a market cap of $375.665 million. The price-earnings ratio stands at 7.50, which is lower than the industry median of 16.56 and the company’s historical median price-earnings ratio. This suggests that the company's stock is undervalued based on earnings.
However, the GuruFocus Value, which is an intrinsic value estimate based on historical multiples, a GuruFocus adjustment factor, and future business performance estimates, suggests a different picture. With a price of $28.5 and a GuruFocus Value of $21.71, Build-A-Bear Workshop Inc has a price-to-GF-Value ratio of 1.31. This indicates that the stock is modestly overvalued.
In conclusion, while the insider's recent sell-off and the trend of insider selling over the past year could be a cause for concern, the company's low price-earnings ratio suggests that the stock might still be undervalued based on earnings. However, the GuruFocus Value indicates that the stock is modestly overvalued. Therefore, investors should tread carefully and conduct further research before making investment decisions.
