Insider Trading Report: CVS Health Corp (CVS)

Edward Ludwig, a director at CVS Health Corp (CVS), recently picked up 3,000 shares. The buy increased his stake by nearly 12 percent, at a total value of around $240,000.

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  • This marks the first insider buy since last February, also from the same director. Company insiders have largely been sellers over the past three years, including both executives and directors. As with many large-cap companies, the sales appear tied to the exercise of stock options.

    Overall, company insiders own just 0.2 percent of shares.

    Yet the drugstore chain has fared well during the pandemic. It’s coming off of some operational losses last year, but its partnership on Covid vaccines and a return to normal appear beneficial for the company going forward as well, with shares looking attractively valued at 11 times forward earnings.

    Action to take: Investors may like shares here, as the stock yields about 2.5 percent at the moment. However, the dividend hasn’t been raised over the past year, and future increases may take time.

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  • Shares hit a 52-week high in early May and have come down a bit, so traders may want to wait for a clearer signal before looking to profit from the company with a call option trade. For now, shares appear to be finding a bottom in the low-$80 to high-$70 range.

    The January $85 calls, last going for $2.75, could probably be bought for a much lower price when shares start their move higher.

     

    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.

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