John Watters, President and COO at FireEye (FEYE), recently picked up 40,000 shares. The buy increased his stake by over 14.4 percent, and came to a total purchase price of just over $680,000.
This follows up on a 10,000 share buy from Watters earlier this month. Insiders have been active buyers since June of this year, including a director and a company EVP. Going further back, however, insiders have generally been sellers.
Overall, company insiders own about 2.1 percent of company shares.
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Shares of the cybersecurity company are up about 18 percent in the past year, underperforming the S&P 500 index by about 12 points. While the firm is currently unprofitable, an increase in customer spending on cybersecurity needs appears to be underway.
Action to take: Investors may like to buy shares to play the company’s improved earnings outlook without the complications of options trading. However, shares don’t currently pay a dividend.
For traders, shares have been trading in a range since last December. Shares have started moving higher in recent sessions after nearing the lower end of the range. That bodes well for a call option trade.
The January $20 calls, last going or about $1.20, stand to move in-the-money on a 10 percent move higher in shares. Traders can likely nab mid-to-high double-digit gains in the months ahead if shares head to the higher end of their trading range—or even start to move to new highs.
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.