Jonathan Foster, a director at Lear Corp (LEA), recently added 231 shares. The buy increased his holdings by 2 percent, and came to a total cost of $32,153.
This marks the first insider buy at the company in the past two years. Otherwise, company insiders, particularly the company President and CEO, as well as the company treasurer, have been sellers of shares, largely from exercising options.
Overall, insiders own 0.2 percent of the company.
The automotive component manufacturer is down 14 percent over the past year. That’s in spite of a 10 percent increase in revenues and a 440 percent jump in earnings.
While shares may be down in sympathy with the overall market and concerns over a slowing economy, shares trade at 10 times forward earnings. That’s inexpensive enough that shares could be set for a market-beating move higher when the economy starts to rally again.
Action to take: The automotive space can be highly cyclical, so investors may want to look to buy shares on a drop closer to the stock’s 52-week low around $115. Shares currently yield 2.2 percent, but patient investors can get a higher starting yield.
For traders, shares have been somewhat rangebound over the past year, and are coming off their peak. The March $130 puts, last going for about $3.00, offer investors mid-double-digit gains in the coming weeks on a further decline in shares.
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.