Russell Weiner, CEO at Domino’s Pizza (DPZ), recently bought 3,333 shares. The buy increased his holdings by 13 percent, and came to a total price just over $1.01 million.
This marks the first insider buy at the company in over two years. The past few years have seen both company directors and executives sell shares on a regular and steady basis, with only a handful of those sales coming from the exercise of stock options.
Overall, company insiders own 0.6 percent of shares.
The pizza chain has dropped about 25 percent in the past year. Even with slowing consumer spending, revenues rose by about 4 percent, but higher costs bit into earnings, which rose by just 2 percent.
Shares are now fairly valued at about 24 times earnings, which is also similar to the valuation of the S&P 500.
Action to take: Domino’s shares are attractive at or under current prices. The company pays a growing dividend, although the current yield is just 1.6 percent. The company’s strong branding should allow it to see a return to faster growth in time, which could also lead to a rally in shares.
For traders, shares are coming off of their 52-week low, set just at the end of February. Chances are the stock will continue to trade higher in the weeks ahead.
The June $350 calls, last going for about $9.20, can potentially deliver mid-double-digit returns or higher in the coming weeks on a continued rally in shares.
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.