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Insiders Active in Vista Outdoor (VSTO) into Fresh Highs

by | Nov 15, 2021

Vista Outdoor (VSTO) with a notable open market buy on 11/10 when a director bought 5000 shares at $44.20, a more than $220K investment into new highs. This is the first insider buy since May 2020 when the stock was trading around $7. VSTO is forming a nice bull flag under $48.75 and consolidation stretching back to mid-May. Shares gapped higher on earnings on 11/4 and pulled back to the 8- and 21-EMA to fill the gap. VSTO has 3000 November $45 calls in OI as well as 2,650 January $40 calls from buyers earlier this year. The $2.5B company trades 6.7X earnings, 0.96X sales, and 11.5X FCF. VSTO is a leading global designer and manufacturer of outdoor products. They have two main businesses, shooting sports and outdoor products. The former focuses on ammo and accessories under the Remington, Bushnell, and Blackhawk brands. And, outdoor products is focused on Foresight, Camelbak, Bell/Giro, and Camp Chei. VSTO is coming off a strong quarter with record sales and EBITDA while they continue to reduce their leverage. They had 35% growth in Q2 with shooting sports up 49%. VSTO has a three-year outlook with plans to boost sales 10% annually, growth EBITDA margins by 15-20%, and expand ecommerce sales to 25% of their total mix. Analysts have an average target for shares of $61 with a Street high $78. Lake Street raising their PT to $61 on 11/5 and sees shares as attractively priced given strong demand for both its shooting sports and outdoor products segments, its strong backlog, improved profitability, and strong balance sheet. B Riley raising estimates in November noting that results came in significantly ahead of expectations as continued ammo demand and increased production helped to offset supply chain and logistical issues. Hedge fund ownership fell 8.5% last quarter. Gates Capital a top holder with 4.1M shares. Short interest is 3.5%.

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