Celso Goncalves, CFO at Cleveland-Cliffs (CLF), recently picked up 6,000 shares. The buy increased his holdings by 4 percent, and came to a total cost just under $18,500.
That buy came a day after the CFO bought 5,000 shares. A company president has also been bullish this year. Over the past three years, company insiders have largely been buyers, with only a handful of sales by company directors.
Overall, insiders at the company own 1.4 percent of shares.
The steel producer has dipped 20 percent in the past year, as investors have become concerned over a slowdown in economic growth. The company is still seeing rising revenue due to higher steel prices overall, with a 25 percent growth rate in the past year.
Action to take: Shares trade at around 4 times forward earnings. While the economy is slowing, a rebound in economic activity could cause shares to move back to their prior long-term rally. At present, the stock does not pay a dividend.
For investors, the January $20 calls, last trading near $2.05, offer mid-to-high double-digit return potential on a move higher in shares in the coming months. Traders can likely scale into the trade, using any market weakness in the coming weeks to buy the options at a lower price.
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.