UTZ

Utz Brands ($UTZ) Executives Buy Shares as Stock Approaches 52-Week Low

05/05/2025 20:45

As Utz Brands Inc ($UTZ) trades near its 52-week low, company executives have been stepping up to signal confidence through insider buying. On May 5th, Utz Brands' EVP Theresa Shea purchased 1,689 shares at $11.84 per share, investing approximately $20,000. This continues a pattern of executive purchases seen over recent months. Utz Brands, founded in 1921, is a leading manufacturer of branded salty snacks in the United States, offering a diverse range of products including potato chips, tortilla chips, pretzels, and popcorn under well-known brands such as Utz, Zapp's, and On The Border. Headquartered in Hanover, Pennsylvania, the company employs approximately 3,000 full-time staff and holds a significant position in the American snack market. However, Utz's stock has endured a challenging 12 months. Trading at around $18 in June 2024, the share price has plummeted to $11.91 as of May 2, 2025, representing a decline of approximately 34%. Particularly concerning was the recent 10% single-day drop in early May, which heightened investor concerns. This price erosion has coincided with broader macroeconomic factors, including uncertainties surrounding U.S. tariff policies and declining consumer confidence. Notably, company insiders have been consistently buying amid the share price decline. On February 24, 2025, CEO Howard A. Friedman purchased 3,525 shares at $14.16, followed by EVP Theresa Robbins Shea buying 1,395 shares at $14.31 the next day. Officer Mitchell Andrew Arends also acquired 2,911 shares at $13.73 on February 28. This series of insider purchases can be interpreted as a signal of management's confidence in the company's future prospects. In contrast, the latter half of 2024 saw significant selling activity. On November 6, 2024, CC Collier Holdings, LLC divested over 2.81 million shares at $17.29 per share, cashing out approximately $48.7 million, while EVP Cary Devore sold 30,000 shares on November 4. The stock price at that time was more than 30% higher than current levels. The company's financial performance stands somewhat at odds with the declining share price. According to first-quarter results released on May 1, 2025, Utz Brands recorded revenue of $352.1 million, representing a 1.6% year-over-year growth, and adjusted EPS of $0.16, exceeding analyst expectations of $0.15. The company also achieved a net income of $7.5 million, recovering from a net loss in the same period last year. Utz has reaffirmed its 2025 outlook, projecting organic net sales growth in the low single digits, adjusted EBITDA growth of 6-10%, and adjusted earnings per share growth of 10-15%. In April 2025, the company strengthened its financial management by appointing William J. Kelley Jr. as the new CFO. Kelley brings valuable experience from his previous role as Global CFO at Tropicana Brands Group. Despite the competitive nature of the snack food industry, Utz Brands has received positive evaluations from analysts, including an upgrade from D.A. Davidson from 'neutral' to 'buy'. Eight out of twelve analysts maintain 'strong buy' or 'buy' recommendations, with a median price target of $21, suggesting significant upside potential from current levels. The recent stock decline has coincided with broader market corrections. During March and April 2025, the S&P 500 and Nasdaq indices experienced substantial drops due to President Trump's tariff policies, inflation concerns, and the possibility of a partial federal government shutdown. On April 4, the U.S. dollar recorded its largest daily decline since November 2022. In this challenging environment, Utz Brands is focusing on supply chain improvements and productivity enhancements. The company's domestic sourcing strategy may provide some insulation from tariff volatility, though continued efforts to improve profitability remain necessary. While the debt ratio stands at a relatively high 74.57%, the current ratio of 1.32 indicates adequate short-term liquidity. The divergence between ongoing insider purchases and improving financial performance against a continuously declining stock price presents both an opportunity and a challenge for investors. Currently, Utz Brands' P/S ratio of 0.73 suggests relative undervaluation compared to revenue, though its ROE of 2.2% lags significantly behind the industry average of 9.4%. Looking forward, Utz Brands' stock recovery will likely depend on sustained improvement in financial performance, enhanced brand visibility through new product launches, and stabilization of the market environment. The current insider buying activity may signal that the stock is trading below intrinsic value, potentially offering an attractive entry point for long-term investors.

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