Insider’s Picks: Massive Upside on the Horizon!


Whenever stock insiders own nearly half of a company, investors should take note. In the case of Canada Goose (TSX: GOOS) (NYSE: GOOS), insiders own approximately 46% of the shares of the company. These shares are owned by the CEO of the company and a private equity firm.

I’ll explain why this is important – and why individual investors should care.

Management should put their money where it is

Every CEO claims to believe in the company they run. Owning a large stake and staying heavily invested is a whole different story.

I like to focus on who owns the shares of a particular investment that I am looking at. It helps tell me how much I think the management team of a given company really drinks the Kool-Aid. It is not enough to wear the corporate t-shirt at corporate events. Having financial exposure to the gains and losses of the business you run is much more important.

In this context, Canada Goose looks like the type of business I want to own. Have long-term shareholders by your side

A huge advantage on the horizon?

As Ryan Vanzo, another Fool contributor, suggested in a recent article, a doubling of the company’s stock price in a matter of months in 2020 was warranted. Additionally, Vanzo suggests another doubling could be on the horizon, but perhaps at a slower pace than in the past.

I couldn’t agree more. I think this stock is about to take advantage of the disproportionate growth in the luxury sales market in 2021. Canada Goose is growing nationally and internationally to some absolutely amazing clips. The fact that international sales continue to skyrocket at over 50% per year, I think, is sustainable for the foreseeable future.

Sales growth in Asia will continue to be the focus of Canada Goose as the company seeks to improve on its already impressive 33% annual growth rate. As international markets become a larger piece of the pie for this company, investors will be able to take advantage of an unprecedented source of growth in Canadian retailing.

Other bullish catalysts

Growing e-commerce sales are also optimistic for Canada Goose investors. This company has done an incredible job of improving their online offerings, reducing their cost profile along the way. Avoiding high rents at expensive international flagship sites by focusing on online sales could further increase margins. I see continued improvement in margins, as well as the aforementioned parabolic revenue growth as the two key investment theses for this stock at this time.

Additionally, Canada Goose has done an amazing job integrating in-house manufacturing. By gaining more control over the supply chain, this company has increased its margins while simultaneously improving some logistical issues that have hampered stocks in the past. Canada Goose’s operating margins have improved significantly in recent times as a result of these changes.

As a result, further expansion of margins could be on the horizon. That’s because I think Canada Goose has only had the tip of the iceberg right now.

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Silly contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Canada Goose Holdings.

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