Pier 1 Imports (PIR) Insiders put faith and money on the line

With so many stocks beat up by the Bear market, you would expect insiders who believe their shares are trading at a discount to buy them outright and show us the way.  Pier 1 Imports, Inc. (NYSE:PIR) has been doing just that, the amount of insider activity is either a case of blind faith or true vision.

Pier 1 insiders have been doubling-down like nobody's business. These guys have buying back shares in the $5 and $6 range during 2007 and in the $3 range as of last week. Of course many of these players sold out shares in April 08 at $7 and change but most of these guys have lost plenty of money buying their own stock during the past year.  Here are the biggest positions being held by Pier 1 Insiders, thanks to Finviz.com

Thanks to Yahoo Finance tracking the Insider buying and selling then using some cut and paste magic along with a nifty pivot table, let's just look at shares bought back during 2008.  Yes, they've all sold during the year which is why the total holdings for these individuals is down, but during 2008, these execs threw some serious money at PIR shares.

Pier 1 Shares Bought Back during 2008

Pier 1 has been in the headlines lately, some good, but mostly bad news, and the result has been new 52-week lows on a weekly basis.

Perhaps the best thing we've heard from Pier 1 was their plan to not buy Cost Plus Inc  (NASDAQ:CPWM).  Cost Plus' stock tanked after that news and has not recovered, Pier 1's stock bounced back but a few weeks later and here we sit at $3 a share.

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Pier One said it was unlikely it would be able to buy the Cost Plus at a price that would make sense for its shareholders. Pier 1 offered to buy Cost Plus last month in a stock swap transaction. In the proposal, Pier 1 said it would issue 0.6 shares of its common stock for each share of Cost Plus common stock, implying a value of $4 per share.  Praise all that is holy they decided to not go through with that offer.  But after a downgrade or two Pier 1 insiders went with what was best for shareholders, another sign the Masters like.

So now what, insiders have thrown down the cash but PIR shares aren't moving?

Pier 1 has to prove to Wall Street they can survive and after last month's Q1 08 $32.8 million loss, it's a harder sell.

Pier 1's first-quarter loss came to $32.8 million, or 37 cents a share, for the period ended on May 31, narrower than the year-earlier loss of $56.4 million, or 64 cents a share. The results were helped by lower expenses and decreased promotional activity.

Sales fell to $310 million from $356 million, hurt by lower traffic in March and April because of a year-earlier promotional event. Pier 1 said traffic improved during May. Analysts expected sales of $338.5 million for the quarter, according to Reuters Estimates.

Sales at stores open at least a year, or same-store sales, fell 5.4 percent in the quarter, but the company noted that same-store sales rose 7.5 percent in May.

Merchandise margins improved to 51.3 percent during the quarter from 45.5 percent a year earlier, reflecting lower promotional and clearance activity. Selling, general and administrative costs fell 17 percent.

Fellow Masters, Pier 1 has much to prove to be a worthy investment during this Bear Market, but they are taking the right steps for shareholders.

PIR shares are volatile, which makes it hard to get on board with the Short Float of PIR shares at 25%. Management is moving in the right direction, but when will Wall Street justify their efforts?

Disclaimer: No positions in the securities mentioned in this publication