Tamara Gustavson, a director at American Homes 4 Rent (AMH), recently bought 422,203 shares. The buy increased her holdings by just over 2 percent, and came to a total price of $15.4 million.
This is the director’s second largest buy of the year, following a 755,000-share pickup back in May, at a cost of just under $21 million. Over the past year, insider buying and selling has been about matched, with sellers having an edge going back further.
Overall, company insiders own 13 percent of the stock.
The single family home rental REIT is down about 7 percent in the past year, about in-line with the S&P 500.
That’s as housing prices have performed strongly, but rising mortgage rates have kept many potential first-time homebuyers away. Earnings are up 36 percent in the past year, and revenue has risen 15 percent.
Action to take: As a REIT, investors may like shares here. The company offers a 2 percent divined yield with the potential for future dividend growth. And the company doesn’t have the borrowing restrictions holding back individuals looking for a mortgage now, so it should continue to benefit from the housing shortage over the next few years.
For traders, the December $40 calls, last going for about $0.77, should deliver mid-double-digit returns in the months ahead. As with any options trading right now, use a down day in shares to buy and look for a quick profit.
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.