Richard Dreiling, CEO at Dollar Tree (DLTR), recently added 7,100 shares to his holdings. The buy increased his stake from just 18 shares, and came to a total cost of just over $1 million.
This marks the first insider buy in nearly a year, when a director bought 425 shares at a cost of just over $66,000. Otherwise, there has been one insider sale over the past year, by the company’s chief strategy officer.
Overall, insiders own 1.3 percent of the company.
The discount retailer is down about 7 percent over the past year, in line with the returns on the S&P 500. Revenues have increased by 9 percent, but earnings have been flat as inflation has raised costs.
Even with the slow growth recently, shares are fairly valued at about 20 times earnings. And the company will likely continue to benefit from customers moving to lower-priced retailers in a slowing economy.
Action to take: Shares have been somewhat rangebound over the past year. Buying in the low $140 range or under, and selling when shares move over $160 could make for a good medium-term trade in the months ahead.
For traders, with shares near the low end of their range, a rally may be in the cards in the coming weeks. The June $155 calls, last going for about $5.00, offer mid-double-digit returns on a 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.