Jab Bevco, a major holder of Keurig Dr Pepper (KDP), recently bought 3,619,600 shares. The purchase increased the fund’s position by 2%, and came to a total cost of $120,677,464.
This marks the first insider activity since early 2024, when the company’s chief R&D officer and two company directors were buyers of shares, with the directors picking up nearly $5 million. Otherwise, insiders have been slight sellers of shares, notably a few division presidents.
Overall, Keurig Dr Pepper insiders own 17.1% of shares, and institutions own 75% of shares.
The beverage giant has underperformed the overall stock market in the past year, with a mere 4% gain.
Keurig Dr Pepper owns a number of top brands in the beverage space, and looks like a moderate value trading at 16 times forward earnings.
The company also reported a 15% profit margin in the past year, a relatively high value given performance in the food and beverage space.
Action to take: After peaking in the fall, shares have been in decline, but are starting to show some signs of strength in the low $30 range. Investors may want to start buying shares here, and use further weakness to pick up more.
At current prices, Keurig Dr Pepper pays a 2.8% dividend.
For traders, the June $35 calls, last trading for about $0.95, could see mid-double-digit returns if shares are able to start trending higher 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.