Mohamad Ali, a director at Henry Schein (HSIC), recently picked up 1,000 shares. The buy cost just over $65,000, and is an initial stake by the director.
Insider trends also show that it’s the first buy at the firm in the past three years. Insiders have been exclusively sellers over that timeframe, including both directors and C-suite executives. The sales have occurred on a regular basis, so some insiders have sold at lower prices than where shares trade today.
Even with the large numbers of sales, insiders own about 1.4 percent of company shares.
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The medical equipment distribution company has seen shares trade flat over the past year. While revenues have grown by double-digit amounts, earnings have dropped off.
However, with shares trading at 1 times price to sales, and at just 17 times forward earnings, this looks like a mid-cap stock with the potential to continue trending higher over the next few months. The buy looks even more attractive as shares have pulled back in recent sessions and are now looking oversold in the short-term on a technical basis.
Action to take: As the company doesn’t may a dividend, investors may want to skip out on buying shares and play the trend with an options trade instead.
The July $65 calls are an at-the-money trade. Last going for $6.80, they now carry a bid/ask spread of $5.30. That’s a reasonable entry price, as shares wouldn’t have to move much to go in-the-money. Traders can likely nab high double-digit gains in the coming months with this trade.