One of the best performers on the market this week has been the Myer Holdings Ltd (ASX: MYR) share price.
In afternoon trade the embattled department store operator’s shares are up over 8% to 46.5 cents.
This means that Myer’s shares have now risen a staggering 22% so far this week.
Why are Myer’s shares rocketing higher?
Investors have been fighting to get hold of Myer’s shares after it emerged that several of the company’s directors have been buying shares on-market following the appointment of its new CEO.
According to three change of director’s interest notices filed over the last couple of days, the following purchases have been made this week:
Executive chairman Garry Hounsell picked up 500,000 shares on-market for a total consideration of $206,936 on Tuesday. This doubled his stake in the company to 1 million shares.
Non-executive director Julie Ann Morrison snapped up 89,788 shares for a total cost of $39,896 through an on-market trade this morning.
And independent non-executive director Ian Cornell has dipped into the market today to snap up 250,000 shares for a total consideration of $107,500.
Is it time to invest?
With three separate directors each making a sizeable purchase of shares it certainly does give me the impression that they are confident in the ability of newly appointed CEO, John King, to turn around Myer’s abject performance.
And while he certainly does have the pedigree to back up this belief, only time will tell whether Myer can reconnect with the consumer and become relevant once again.
At a little under 11x estimated FY 2018 earnings Myer’s shares are looking decidedly cheap, but I intend to resist making an investment until there are signs that its turnaround is working.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.