Christopher Bode, President and COO at Denny’s (DENN), recently bought 9,740 shares. The buy increased his stake by over 1,000%, and came to a total cost of $49,805.
This marks the first insider buy since last June, when the company CFO bought 10,000 shares for just over $65,000. Going further back, insiders were more likely to be sellers, particularly in 2023, when shares traded for nearly twice as much as they do today.
Overall, Denny’s insiders own 3.1% of shares.
The diner chain has struggled in recent years, and the stock is down over 40% in the past 12 months. Earnings growth has been negative, and revenues dropped 1% in the past year.
Denny’s had had to contend with rising food costs, particularly eggs, as well as a slowdown in customer traffic following years of price increases for dining out.
Even with that decline, shares trade at 12 times current earnings, and at a 0.6 price to sales multiple, suggesting some potential value here.
Action to take: Shares just hit a new 52-week low recently, following the announcement of more location closures. With the current downtrend, interested investors should hold off for now.
For traders, with the current downtrend in shares, a put option trade may be the best play here. The August $5 puts, last trading for about $0.65, are an at-the-money trade, and could see mid-double-digit returns from a further decline in shares in the months ahead.
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.
