Ryan Lance, a director at Freeport-McMoRan (FCX), recently added 31,000 shares to his holdings. The buy increased his stake by a staggering 368 percent, and came to a total price of just over $988,000.
The move comes as another director bought 3,000 shares back at the start of August. Over the past three years, insiders have generally been more active as sellers rather than buyers of the company stock.
Overall, insiders own about 0.5 percent of shares.
The base metal producer is down about 18 percent in the past year. Earnings have slid 22 percent and earnings have slid 6 percent, even with fairly strong prices holding up for commodities.
Action to take: Even with the decline in earnings, the company earns a 20 percent profit margin, which is substantially high for a commodity producing company.
Plus, shares go for just over 11 times earnings, making for an attractive valuation now. Investors may like to start picking up shares here. At present, shares also yield about 2 percent.
For traders, shares may have a little more weakness in the weeks ahead. Shares have slid quickly that there’s not a worthwhile premium with a short-term put trade now.
But buyers who ease into the January 2023 $35 calls, last going for about $1.55, can play a rebound later in the year into mid-to-high double-digit returns.
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.