Shares of Entercom Communications (NYSE:ETM) are up over 12% in midday trading Thursday after the radio broadcaster said its CEO was buying up stock.
While it wasn't nearly as much as Entercom's chairman emeritus purchased earlier this year when he scooped up some 1.2 million shares, CEO David Field's purchase of over 122,000 at prices ranging between $1.55 and $1.66 per share was a bullish sign for investors. He now owns almost 1.5 million shares.
Investing legend Peter Lynch once noted that insiders can sell their stock for any number of reasons, but they typically buy it for only one reason: They think it's going to go up.
While plenty of executives have sought to prop up their company's stock by making big purchases, only to see it fall, it's notable that Chairman Emeritus Joseph Field's purchases have gained since he made them at prices ranging from $1.20 to $1.45 per share.
Still, Entercom's recent earnings report missed analyst expectations, recording a loss of $0.40 per share due to the pandemic on revenue of $176 million. Both of those were below Wall Street's consensus view of $198 million in revenue and a loss of $0.38 per share for the radio broadcaster.