PEB

Pebblebrook Hotel ($PEB) CEO Invests $3M Amid 37% Stock Decline - 'Conviction Buying'

06/09/2025 12:20

$PEB (Pebblebrook Hotel Trust) has caught market attention with aggressive buying by Chairman and CEO Jon Bortz amid a 37% stock decline over the past year. From May to June 2025 alone, CEO Bortz purchased 94,000 shares, investing approximately $820,000, with cumulative purchases exceeding $3 million since June 2024. Bortz's buying pattern is particularly noteworthy. Following the sharp decline from the $14 range to $9 range after April 2024, he has consistently purchased shares, with the most aggressive buying occurring between March and May 2025 when the stock traded around $9-10. In May alone, he acquired 114,000 shares for a total of $1.1 million at an average price of $9.27 per share. Other executives including Michael Schall and Ron Jackson have also joined in, demonstrating insider confidence. Pebblebrook Hotel Trust is the largest owner of urban and resort lifestyle hotels and resorts in the U.S., with 46 hotels and resorts totaling approximately 12,000 guest rooms across 13 urban and resort markets. Headquartered in Bethesda, the company operates a premium lifestyle property portfolio targeting both business and leisure travelers in key gateway cities and resort destinations. Recent results show signs of recovery. Q1 2025 revenue increased 2% year-over-year to $320.27 million, surpassing analyst expectations by 0.75%. Notably, earnings per share (EPS) turned positive at $0.16 from -$0.32 in the prior year, beating analyst estimates by 23%. While room revenue declined slightly, food & beverage segment growth of 6.4% demonstrated revenue diversification benefits. However, the broader hotel REIT sector continues to face challenges. Wells Fargo reduced price targets for U.S. lodging REITs while maintaining a negative market outlook, citing pressured consumer spending and cautious revenue growth expectations for the leisure segment. The S&P 500 Hotel & Resort REITs sub-index has declined 11.7% year-to-date. From a financial health perspective, signals are mixed. The company maintains $219.07 million in cash, supporting good liquidity, but carries high leverage with a debt-to-equity ratio of 95.82%. While trailing twelve-month net loss reached $51.4 million, levered free cash flow of $200.94 million demonstrates solid cash generation capability. Wedbush downgraded Pebblebrook to 'underperform' citing potential market volatility in 2025, yet insider buying patterns suggest contrarian signals. CEO Bortz, a veteran with over 20 years in the hotel industry, has led Pebblebrook's growth into the largest lifestyle hotel REIT in the U.S. since founding the company in 2010. Market observers interpret this large-scale insider buying as more than opportunistic purchasing. Particularly notable is CEO Bortz's purchases through family member accounts, indicating strong personal conviction. This reflects management's belief that the hotel industry's structural recovery combined with Pebblebrook's premium positioning will create long-term value. With Q2 earnings scheduled for July 22-28, 2025, market attention focuses on whether insider buying patterns and Q1 improvement trends will continue. Current analyst consensus rating is 'hold' with a median 12-month price target of $11, suggesting approximately 22% upside potential from current levels.

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