SMPL

Simply Good Foods ($SMPL) President's $200K Purchase Marks First Insider Buying Since November's Mass Selling

07/24/2025 01:14

Simply Good Foods Company ($SMPL) is a Denver-based mid-cap food company with a $3.66 billion market capitalization, owning health-conscious snack brands including Quest, Atkins, and OWYN. The company has caught investors' attention for a simple yet compelling reason: President Geoff Tanner purchased 6,050 shares at $33.11 per share on July 23rd, totaling over $200,000, as the stock trades near multi-month lows after declining over 20% from its $40 peak. This purchase carries particular significance because it directly contrasts with massive insider selling activity in November 2024 when shares traded in the $35-37 range. During that period, Director Joseph Scalzo sold over $14 million worth of shares across multiple transactions, while Director Brian Ratzan disposed of $3.4 million in holdings. Chief Legal Officer Timothy Kraft also sold $3.6 million, contributing to over $20 million in insider sales during November alone. So why has the stock declined despite solid fundamentals? The company's Q3 2025 results released on July 10th showed revenue growth of 13.8% year-over-year to $381 million, with adjusted EPS of $0.51 meeting consensus expectations. Annual revenue stands at $1.46 billion with a healthy 10% profit margin, while the balance sheet remains robust with just 16.5% debt-to-equity ratio and a strong 3.95 current ratio. The challenge lies in structural shifts within the portfolio. While Quest and OWYN brands, representing 70% of sales, continue delivering double-digit growth, the legacy Atkins brand faces distribution challenges and reduced merchandising support. Additionally, inflationary pressures and tariff headwinds have squeezed margins, causing investor concern despite overall revenue growth. Year-to-date, shares have declined 16%, significantly underperforming the S&P 500. This backdrop makes Tanner's purchase particularly noteworthy. It represents the first insider buying signal in eight months following November's heavy selling, suggesting management sees value at current price levels. Tanner, who became president in March 2023, has successfully positioned Quest on a trajectory toward $1 billion in net sales, making his purchase more than just a financial investment—it signals confidence in business prospects. The key metrics investors should monitor are straightforward: continued growth momentum in Quest and OWYN brands, and any signs of Atkins recovery. Given these two high-growth brands comprise 70% of the portfolio, maintaining their trajectory will be crucial for stock price recovery. Additionally, any easing of margin pressures from inflation and tariffs would serve as important catalysts. From a valuation perspective, $SMPL appears attractive. Trading at 17x forward P/E and 2.29x price-to-sales—reasonable multiples given the growth profile—the stock also exhibits lower volatility with a 0.68 beta. Institutional ownership at 97.9% reflects professional investor confidence in the long-term story. In an optimistic scenario, Quest's march toward $1 billion revenue combined with continued OWYN growth and Atkins recovery could drive shares back toward $40+ levels. The base case envisions momentum maintenance leading to recovery in the $35-38 range, while the risk scenario involves continued Atkins weakness and persistent margin pressures testing support around $30. Ultimately, Tanner's purchase signal suggests current price levels offer attractive value for a company with structural growth drivers in the health-conscious snacking market and solid financial fundamentals. As the first insider buying activity since November's heavy selling, it represents a meaningful vote of confidence in $SMPL's prospects at these levels.