William Giles, a director at Constellation Brands (STZ), recently bought 1,000 shares. The buy increased his stake by a massive 216%, and came to a total cost of $186,390.
This marks the first insider buy at the company over the past two years. Insiders have been hefty sellers of shares over the past two years, including the President & CEO, as well as major holders. Most sales occurred at prices at least 30% higher from where shares currently trade.
Overall, Constellation Brands insiders own 11.9% of shares.
The brewing giant is down 27% over the past year. Consumer tastes are shifting away from beer and alcohol in general. Plus, years of high inflation have led to some sticker shock and a cutback on beverage spending.
Operationally, Constellation has handled these headwinds well. While growth has declined, Constellation managed to increase revenues by 3% over the past year. Following the recent decline in shares, Constellation trades at 12 times earnings.
Action to take: Shares are inexpensive, and Constellation owns a number of leading brands in the beer and wine space. Interested investors may like shares at their current valuation. Plus, Constellation pays a 1.8% dividend at current prices.
For traders, shares are oversold and trading near their 52-week low. The April $200 calls, last trading for about $2.55, could see mid-to-high double-digit returns on any bounce in shares over the next few months.
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 company mentioned in this article.