Donal Mulligan, a director at Herbalife Nutrition (HLF), recently bought 15,000 shares. The buy increased his holdings by 64 percent, and came to a total cost just under $290,000.
The buy came a day after a different director bought 8,500 shares, paying just under $166,000. Overall, company insiders and directors have been regular and steady buyers of Herbalife stock, with only two small sales over the past two years, amid nearly two dozen insider buys.
Overall, insiders own 2 percent of the nutritional supplement company.
Shares have been knocked down by nearly half over the past year. Revenues are also down 10 percent, but earnings are up 42 percent. That’s resulted in a company that trades like a value investment right now, with a price to sales ratio just under 0.4, and with shares trading at just 6 times forward earnings.
Action to take: Long-term investors may like shares here for their appreciation potential. Shares have been trending up steadily from last year’s lows, and are still heavily beaten-down. However, with no dividend, investors won’t get paid to wait for shares to move higher.
For traders, the June $22.50 calls, last going for about $1.20, offer mid-double-digit returns in the coming months if Herbalife shares can continue their long-term rally.
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.