OMI

As Owens & Minor ($OMI) Shares Plunge 53%, Insider Trading Dramatically Shifts From Executive Selling to $31.7M Major Shareholder Buying Spree

04/08/2025 00:29

Medical logistics and supply chain management company Owens & Minor ($OMI) is exhibiting a dramatic shift in its insider trading patterns. The transformation from consistent executive selling in 2024 to aggressive buying by major shareholders in early 2025 sends a notable signal to investors monitoring this small-cap healthcare firm. OMI's stock has experienced a precipitous decline over the past 10 months. From trading around $17.50 in early June 2024, the shares have plummeted approximately 53% to their current level of $8.16. Particularly shocking was the rapid 35% collapse in early February 2025, when the stock dropped from $14 to $9 in a matter of days. Against this backdrop of price deterioration, insider activity has shown a stark contrast. In June 2024, when $OMI was trading around $17, multiple high-ranking executives executed substantial sales. EVP Alexander Bruni sold 10,568 shares ($187,688) on June 3, EVP Snehashish Sarkar divested 9,980 shares ($172,854) on June 4, Director Mark Beck sold 9,344 shares ($161,184) on June 5, and EVP Perry Bernocchi sold 20,015 shares ($349,924) on June 6. Notably, Bernocchi's transaction was executed pursuant to a Rule 10b5-1 trading plan adopted in March 2024. Additional executive selling continued in August and November, albeit at diminishing volumes. The situation changed dramatically in late February 2025, following the stock's collapse. Major shareholder Coliseum Capital Management began aggressively accumulating shares, seeing opportunity in the price decline. Over approximately one month from February 28 to April 7, Coliseum purchased a total of 3,421,768 shares worth approximately $31.7 million. The buying spree included 1,738,511 shares ($16.3M) on February 28 alone, followed by 1,154,901 shares ($11.1M) on March 3-4, and another 528,356 shares ($4.3M) between April 3-7. This reversal in insider trading patterns coincides with several pivotal business developments for $OMI. Most notably, in July 2024, the company announced the acquisition of Rotech Healthcare for $1.36 billion, intending to strengthen its presence in home-based medical services. While the stock initially rose 7% on this news, concerns about the financial burden of this acquisition soon began weighing on the share price. These concerns materialized on February 3, 2025, when $OMI released preliminary Q4 results showing revenue of $2.67-$2.70 billion, below market expectations of $2.73 billion, triggering the stock's sharp decline. Furthermore, the company indicated it would need to raise additional debt for the Rotech acquisition, subsequently announcing a $600 million senior secured notes offering (due 2030) on March 26. In this context, Coliseum Capital's substantial buying activity deserves special attention. The investment firm likely believes the current price significantly undervalues the company's long-term prospects. Indeed, $OMI's forward P/E ratio stands at just 4.66, considerably below the U.S. healthcare industry average. Owens & Minor was founded in 1882 and has a 140+ year history of providing medical supply chain management services across more than 70 countries, employing approximately 20,000 people. The company generated $10.3 billion in revenue in 2023, with forward EPS projected at $1.75. However, $OMI currently faces multiple challenges: financial strain from the Rotech Healthcare acquisition, underperforming results, and the potential impact of the Trump administration's reciprocal tariff policies on the medical supply chain. On April 3, medical supply distributors saw their stocks decline following Trump's tariff announcement, as these policies are expected to affect personal protective equipment (PPE) imported from Southeast Asia. In summary, while $OMI may face short-term pressure from financial burdens, underwhelming performance, and changing tariff policies, the aggressive buying by major shareholders could be interpreted as a positive signal from a long-term value investment perspective. Nevertheless, investors should carefully monitor the $600 million debt issuance and uncertainties surrounding the integration process of the large-scale acquisition.

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