PEB

Pebblebrook Hotel Trust ($PEB) CEO Buys $620K of Shares in May Amid Stock Plunge: Insider Confidence vs. Industry Headwinds

05/16/2025 22:10

As Pebblebrook Hotel Trust ($PEB) shares continue their downward trend since early 2025, Chairman Jon Bortz has been making significant stock purchases that have caught the market's attention. Particularly noteworthy is his substantial buying activity after the stock dipped below $9 in May, with acquisitions totaling over $600,000 in just one week. According to SEC filings, Bortz purchased 42,000 shares ($375,480) on May 6th, followed by 15,000 shares ($134,550) on May 7th, and an additional 10,787 shares ($108,625) on May 16th. This represents a total investment of approximately $618,655 for 67,787 shares. Additionally, board member Michael Schall acquired 10,000 shares ($90,400) on May 7th. These purchases appear to be part of a consistent pattern rather than isolated transactions. In March 2025, when the stock experienced a significant decline, Bortz acquired a total of 53,000 shares worth approximately $544,330 across two separate transactions. He also demonstrated consistent buying behavior during price dips in August and November 2024, accumulating a total of 280,787 shares worth over $3 million over the past year. Pebblebrook Hotel Trust is a Real Estate Investment Trust (REIT) that owns and operates 46 hotels and resorts across the United States, managing approximately 12,000 guest rooms across 13 key markets. The company has faced challenges in recent years due to the pandemic and subsequent downturn in the travel industry, reporting a net loss of $32.2 million in the first quarter of 2025. According to the Q1 results announced on May 1st, Pebblebrook's revenue increased by 2% year-over-year to $320.27 million, though the company remains unprofitable. The net loss per share was $0.34, slightly worse than the $0.32 loss reported in the same quarter last year. However, room revenues of $196 million and Adjusted Funds From Operations (FFO) of $18.7 million showed signs of partial recovery. The hotel REIT sector as a whole is currently facing significant headwinds. Wells Fargo lowered price targets for U.S. hotel REITs in September 2024, maintaining a negative outlook, while Wedbush downgraded Pebblebrook Hotel Trust to 'underperform' in January 2025. The S&P 500 Hotel & Resort REITs sub-index declined by 11.7% in 2024 alone. Despite the negative analyst sentiment, insider buying, particularly by the CEO, represents a noteworthy signal. Insiders are generally considered to have better information about a company's internal situation and prospects than the average investor. In Pebblebrook's case, the stock had fallen approximately 40% from its December 2024 peak of $14.9 to $8.9 in early May, but rebounded to $10.59 by May 12th, shortly after Bortz's purchases. However, insider buying alone doesn't resolve the fundamental challenges facing the company. Industry-wide difficulties, particularly pressured consumer spending and cautious revenue growth expectations in the leisure segment, may continue to burden Pebblebrook's performance. Additionally, insider transactions sometimes serve purposes beyond market timing, such as personal portfolio management or confidence building. Nevertheless, the substantial purchases by the CEO and board member provide a strong indication that insiders believe the current stock price undervalues the company. In particular, Bortz has a track record of purchasing during price declines that were followed by subsequent rebounds. Investors should consider these insider buying signals alongside other factors such as the potential recovery in the travel industry, changes in the interest rate environment, and Pebblebrook's cost efficiency efforts. While the hotel REIT sector will likely continue to face challenging conditions in the near term, the confidence displayed by insiders could serve as a positive signal for long-term investors.

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