Stephen Donaghy, CEO at Universal Insurance Holdings (UVE), recently added 5,000 shares. The buy increased his stake by 1 percent, and came to a total cost of $60,350.
This marks the first insider but since last October, when a director bought 3,000 shares at a price 20 percent lower than where the stock trades today. Since then, company insiders have been sellers, at prices 30 to 40 percent higher than where shares currently trade.
Overall, company insiders own 10.1 percent of shares.
The property insurer is up about 2 percent over the past year. Shares have fared better, but the company has a large exposure to hurricane coverage and are selling off amid the peak of hurricane season.
Revenues are up 16 percent over the past year, and earnings are up 288 percent.
Action to take: Investors should see shares move higher after hurricane season, at the end of November. Until then, shares may be volatile depending on weather conditions.
At present, shares yield 5.3 percent, but that could go away if there’s a major hurricane and substantial losses.
For traders, the current trend is down. The November $10 puts, last going for about $0.30, could see high-double-digit returns or higher if there’s a major storm impacting the U.S. in the coming months.
As the hurricane season ends, look to buy call options and play the upside in the months following the end of season.
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.