Insider Activity Report: Bristol Myers Squibb (BMY)

Theodore Samuels, a director at Bristol Myers Squibb (BMY), recently bought 8,500 shares. The buy increased his stake by 31 percent, and came to a total cost of $423,385.

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  • This marks the first insider buy at the company in the past two years. Insiders have been regular sellers of shares, including sales from the CEO and CFO. Some sales have been from the exercise of stock options, but most have not.

    Overall, BMY insiders own about 0.1 percent of shares.

    The prescription drug manufacturer has lost about 40 percent over the past year. Revenues are down 2 percent, even as earnings have jumped 20 percent.

    That’s created a value play, with shares now trading for just 6 times forward earnings, down from nearly 24 times earnings at the start of the year.

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  • Action to take: Investors should wait for the current downtrend to end. With shares beaten down, the dividend has been pushed up to 4.7 percent. It’s likely that shares can recover in time, and investors will be well paid for their patience, once a new uptrend starts.

    For traders, the current trend is down. That may not last much longer, but until it changes, a put option trade like the February $45 puts, last going for about $0.90, could see mid-to-high double-digit returns on a further drop.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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