Patrick Gelsinger, CEO at Intel (INTC), recently picked up 10,000 shares of the company. The buy increased his stake by nearly 21 percent, and came to a total purchase price of just over $995,000.
He was joined by a number of company directors, one of whom picked up 20,000 shares totaling just under $2 million. The smallest director buy in this latest cluster was for 5,000 shares, coming in at just under $250,000.
This is a solid show of strength from company management following the stock’s recent dive since its last earnings report. However, company insiders still own a mere 0.07 percent of company shares.
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Suffering from delays thanks to the chip shortage, Intel is now up less than 10 percent over the past year, significantly underperforming the S&P 500. Even with the recent disappointing quarters, earnings are up nearly 60 percent in the past year, and the company trades at 11 times forward earnings.
Action to take: Investors may like shares under $50 as an accumulation trade. The stock yields 2.8 percent here, and the dividend has had some small increases over the years. A rebound in shares on top of that could lead to solid returns in the months ahead.
For traders, the latest insider buy may not quite signal an end to the selling yet, but that it’s close. Once shares start heading higher, a trade like the March $55 calls could fare well. That option last went for $0.97, and on a move higher in shares could deliver high double-digit returns, or even head into triple-digit territory.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.