Donna Zarcone, a director at Cigna Corp (CI) recently picked up 1,000 shares. The buy increased her stake by nearly 4 percent, and came at a total cost of just under $211,000.
This is the first insider buy at the healthcare plan company in nearly a year, following a buy last September from the company CFO. Overall, insiders have been hefty sellers of shares, even as the price has continued to climb higher.
Insiders own about 1.5 percent of all company shares. The healthcare plan firm has been a relative underperformer as other parts of the healthcare space have better benefitted from the pandemic.
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Shares are up 14 percent over the past year, about half the return of the overall S&P 500 index. Profitability has been low as well, with a modest profit margin, and slight revenue growth, but overall a drop in earnings.
Action to take: Healthcare plans aren’t going away anytime soon, and despite lackluster performance over the past year, shares are attractive at around 11 times forward earnings. The company also recently doubled its dividend, but the payout and yield are still quite low, with the most recent yield at about 1.9 percent.
Shares have been gradually trading higher, and traders could potentially leverage that return higher in the next few months. The January $230 calls, last going for about $6.30, could provide mid-to-high double-digit returns before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may make a trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.