Underperforming shares of Avis Budget Group may see a turn around as the company’s Chairman and CEO Ronald Nelson makes a $1 million share purchase, Barron’s reports.
At an average price of $16.39 per share, Nelson recently bought 61,000 shares, according to a same-day filing with the Securities and Exchange Commission. The transaction boosted his total company holdings by 41 percent–he still holds less than 1 percent of Avis' outstanding shares.
According to InsiderScore.com, Nelson's purchase marks the first insider buy since Avis became an independent company following the four-way breakup of Cendant in the summer of 2006.
The transaction comes during a roller-coaster time for Avis. Recently, the company reported a net profit of $103 million versus a year-earlier loss of $1.01 billion.
Investors were preoccupied, however, with the company's guidance, which pegged full-year 2007 revenue at approximately $6 billion, the lower end of its previous estimate. On an investor earnings call, Nelson said uncertainty about the leisure side of the market had pushed the company toward the more conservative outlook.