Karat Packaging Inc. (NASDAQ:KRT) Sees Significant Increase in Short Interest

Key Points

• Karat Packaging Inc. experienced a significant increase in short interest in August, with total short interest rising by 27.4% to 133,100 shares.
• CEO Alan Yu sold 112,500 shares of the company’s stock for approximately $3.04 million, decreasing his ownership by 1.81%.
• The company announced a quarterly dividend of $0.45 per share, resulting in an annual yield of 7.4%, despite a high dividend payout ratio of 113.21%.

Karat Packaging Inc. (NASDAQ:KRT - Get Free Report) was the recipient of a large increase in short interest during the month of August. As of August 31st, there was short interest totaling 133,100 shares, an increase of 27.4% from the August 15th total of 104,500 shares. Based on an average trading volume of 93,600 shares, the short-interest ratio is presently 1.4 days. Currently, 1.5% of the company's shares are short sold. Currently, 1.5% of the company's shares are short sold. Based on an average trading volume of 93,600 shares, the short-interest ratio is presently 1.4 days.

Insider Activity at Karat Packaging

In related news, CEO Alan Yu sold 112,500 shares of the stock in a transaction dated Friday, June 27th. The shares were sold at an average price of $27.00, for a total value of $3,037,500.00. Following the completion of the transaction, the chief executive officer owned 6,091,305 shares of the company's stock, valued at approximately $164,465,235. This trade represents a 1.81% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Insiders own 66.10% of the company's stock.

Hedge Funds Weigh In On Karat Packaging

A number of hedge funds and other institutional investors have recently modified their holdings of the business. Ranger Investment Management L.P. boosted its stake in shares of Karat Packaging by 105.7% during the second quarter. Ranger Investment Management L.P. now owns 320,556 shares of the company's stock valued at $9,027,000 after purchasing an additional 164,716 shares in the last quarter. State of Tennessee Department of Treasury boosted its stake in shares of Karat Packaging by 6.7% during the second quarter. State of Tennessee Department of Treasury now owns 18,041 shares of the company's stock valued at $508,000 after purchasing an additional 1,138 shares in the last quarter. Wasatch Advisors LP boosted its stake in Karat Packaging by 3.3% in the second quarter. Wasatch Advisors LP now owns 330,961 shares of the company's stock valued at $9,320,000 after acquiring an additional 10,617 shares in the last quarter. Lazard Asset Management LLC boosted its stake in Karat Packaging by 1.9% in the second quarter. Lazard Asset Management LLC now owns 40,390 shares of the company's stock valued at $1,137,000 after acquiring an additional 770 shares in the last quarter. Finally, Engineers Gate Manager LP acquired a new stake in Karat Packaging in the second quarter valued at approximately $440,000. 25.20% of the stock is currently owned by institutional investors.

Analysts Set New Price Targets

A number of analysts recently weighed in on KRT shares. Wall Street Zen lowered shares of Karat Packaging from a "strong-buy" rating to a "buy" rating in a research report on Saturday, August 9th. Bank of America assumed coverage on shares of Karat Packaging in a research report on Wednesday, August 13th. They set a "neutral" rating and a $28.00 target price on the stock. One research analyst has rated the stock with a Buy rating and three have given a Hold rating to the company's stock. According to MarketBeat.com, Karat Packaging presently has a consensus rating of "Hold" and a consensus price target of $31.67.

Karat Packaging Stock Down 1.1%

Shares of NASDAQ KRT traded down $0.28 during midday trading on Friday, reaching $24.12. 348,242 shares of the company's stock traded hands, compared to its average volume of 80,822. The company has a quick ratio of 1.40, a current ratio of 2.68 and a debt-to-equity ratio of 0.29. The stock's 50 day simple moving average is $26.08 and its 200-day simple moving average is $27.33. Karat Packaging has a one year low of $23.00 and a one year high of $33.89. The company has a market cap of $484.57 million, a price-to-earnings ratio of 15.17, a P/E/G ratio of 1.28 and a beta of 1.11.

Karat Packaging Dividend Announcement

The firm also recently disclosed a quarterly dividend, which was paid on Wednesday, August 27th. Stockholders of record on Wednesday, August 20th were paid a dividend of $0.45 per share. The ex-dividend date was Wednesday, August 20th. This represents a $1.80 dividend on an annualized basis and a dividend yield of 7.5%. Karat Packaging's dividend payout ratio (DPR) is currently 113.21%.

About Karat Packaging

Karat Packaging Inc, together with its subsidiaries, engages in the manufacture and distribution of single-use disposable products in plastic, paper, biopolymer-based, and other compostable forms used in various restaurant and foodservice settings. It provides food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves, and other products under the Karat Earth brand.