Timothy Wentworth, CEO of Walgreens Boots Alliance (WBA), recently added 10,000 shares. The buy increased his stake by 2 percent, and came to a total cost of $242,220.
This is the first insider buy since last June, when an executive vice president picked up 5,172 shares at a cost of just under $147,000. Otherwise, there has been one insider sale in the past year for a mere 1,000 shares.
Overall, Walgreens insiders own 17.4 percent of shares.
Shares have dropped by over 30 percent in the last 12 months. And the drugstore/ pharmacy chain has barely broken even over the past year, despite a 10 percent rise in revenues.
Walgreens looks inexpensive at less than 8 times forward earnings, but shares have traded under 10 times forward earnings for most of the past two years.
Action to take: Shares have been trending higher since late November, so it’s possible the recent low is in. If shares continue to trend higher, Walgreens could be an outperformer this year given its selloff over the last year, making it a speculative buy now.
At current prices, shares yield 4 percent. Walgreens cut its dividend nearly in half over the last year, which may have spooked away many investors.
For traders, the April $30 calls, last going for about $0.70, could see high double-digit returns or better on a further rally in WBA 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.