I hope all the Real Money community has a joyous and relaxing long holiday weekend planned with friends and family. Thursday saw the shortened trading week close on a up note, although the rally was muted. The Nasdaq led the way, gaining two-thirds of a percent while the Dow was flat and the S&P 500 managed to move up 0.4%.
There doesn't seem to be much conviction in either direction right now in the market. However, the job market seems to be somewhat deteriorating. Job openings fell to under 10 million this week for the first time in nearly two years and the ADP Jobs report Wednesday came in significantly under the consensus as well. Friday morning, the BLS March Jobs Report showed 236,000 jobs were created last month. Slightly below expectations, but still a solid number.
I am not seeing much conviction either from corporate insiders as I peruse insider transactions. However, here a couple of new names have popped up on my radar for deeper research thanks to recent insider purchases. Let's start with Walgreens Boots Alliance (WBA) , operator of the well-known Walgreen pharmacy stores here in the United States.
The company's CEO just added nearly $340,000 worth of new shares at the end of March. Notably, it was the first insider purchase in this name in nearly three years. The buy by the CEO came the day after the company posted solid fourth quarter results.
This pharmacy focused concern has some headwinds as Covid 19 activity is falling quickly. It should still see revenue growth in the low single digits in FY2023, which given the current level of inflation, means slightly lower volume this fiscal year. Profit is projected to be down 10% this year as well. However, the shares do trade at just seven times trailing earnings and yield north of 5% to boot. More than a reasonable valuation in this market in my opinion.
Next, going way out on the risk scale, we have the first insider purchase in small-cap name Skillz Inc. (SKLZ) in over a year as the company's CEO adds more than a $1 million worth of equity to his stake in the firm. Skillz provides a platform that allows independent game developers to host tournaments and provide competitive gaming activity to end-users worldwide.
The stock came public to much fanfare in late 2020 during the SPAC boom. After quickly soaring past $40 a share, the stock has been an unmitigated disaster for shareholders. The equity currently trades for less than a buck a share with a market capitalization of just over $300 million.
However, an investor is almost getting the company for the net cash on the company's balance sheet at these trading levels. In addition, Skillz does have nearly a quarter of a million paying active users. The company has recently restructured its management team and should soon restate their financial statements from 2020 to 2022.
The company also substantially reduced its cash burn in the fourth quarter. It is probably way too soon to believe or invest in a possible turnaround story, but the CEO's large purchase and seeming conviction does put SKLZ on my 'watch list' pending further developments.
