Shares of outdoor and camping retailer Camping World Holdings (NYSE:CWH) jumped 10.5% on Friday. The gain was likely due to investor optimism over Abrams Capital Management's significant purchase of the stock.
In a filing with the Securities and Exchange Commission, Camping World revealed that Abrams Capital had increased its stake in the company from about 5.5 million shares to 6.1 million. The increased stake cost Abrams Capital $5.2 million.
With Abrams now holding a 16% stake in the company, the large addition may be seen as a sign to investors that the company is doing well.
While it's good to see a large Camping World shareholder demonstrating confidence in the stock, investors should remain focused on the underlying business. Insider purchases don't automatically mean that the stock is set to perform well in the future.