PEB

Amid Stock Plunge, Pebblebrook Hotel ($PEB) CEO Scoops Up 53,000 Shares at $10 Range

03/24/2025 22:33

Pebblebrook Hotel Trust ($PEB) Chairman and CEO Jon E. Bortz has been aggressively purchasing company shares amid a significant stock price decline. His buying spree has been particularly notable as the stock plunged to the $10 range in March. $PEB shares have steadily declined this year, falling to $10.27 per share as of March 21, 2025, representing a roughly 31% drop from the mid-December high of $14.9. Against this backdrop, Chairman Bortz purchased a total of 53,000 shares (approximately $544,330) on March 21 and 24. Most notably, he acquired 28,000 shares at $10.11 per share on March 21, a price near the 52-week low. This isn't Bortz's first purchase this year. He also bought 15,000 shares ($178,650) on March 5, while Director Michael J. Schall purchased 10,000 shares ($118,700) on the same day. According to disclosure documents, Bortz's transactions primarily involve restricted units of limited partnership interest (LTIP Class B Units) in Pebblebrook Hotel, L.P., which can be exchanged for Operating Partnership units or cash upon achieving parity with common units. Bortz has consistently been a buyer during periods of stock weakness since last year. He purchased a total of 96,000 shares in August 2024 when the stock fell to around $12, and another 46,000 shares in November when the price again dropped to the $12 range. However, he did sell 11,000 shares on November 12, 2024. Pebblebrook's recent financial performance has been challenging. According to Q4 2024 results released in February 2025, the company reported a net loss of $49.8 million. Nevertheless, revenue increased by 1.1% year-over-year to $337.60 million, exceeding analyst expectations of $330.58 million. For the full year 2024, the company posted an adjusted loss per share (EPS) of $0.39. Pebblebrook is a real estate investment trust (REIT) that owns and operates 46 upper upscale and luxury hotels across the United States, with approximately 12,000 guest rooms. The entire hotel REIT sector has been struggling recently, with the S&P 500 Hotel & Resort REITs sub-index declining 11.7% year-to-date. This downturn has been attributed to pressured consumer spending and cautious revenue growth expectations for the leisure segment. Wall Street analysts maintain a consensus 'hold' rating on $PEB. However, price targets have been trending downward, with Wells Fargo maintaining a negative market outlook for U.S. lodging REITs and cutting price targets in September 2024, while Wedbush downgraded Pebblebrook to 'underperform' in January 2025. Currently, Pebblebrook has a market capitalization of approximately $1.25 billion and a debt-to-equity ratio of 80.6%. Its dividend yield is modest at 0.4%, and its 1-year price return of -33.7% stands in stark contrast to the S&P 500's 8.2% gain during the same period. Insider buying, especially by a CEO, is typically interpreted as a positive signal reflecting management's confidence in the company's outlook. Bortz's consistent purchasing during periods of stock decline suggests he believes the current share price undervalues the company's intrinsic worth. His substantial purchases at prices in the low $10 range are particularly noteworthy. However, investors should also consider risk factors including the broader challenges facing the hotel industry and Pebblebrook's recent performance struggles. It's important to monitor the impact of economic slowdown and interest rate environments on hotel REITs, as well as potential catalysts for performance recovery.

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