Insider Trading Report: Loop Industries Inc (LOOP)

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  • Daniel Solomita, President and CEO of Loop Industries (LOOP), recently bought 10,000 shares. The buy increased his stake by 5 percent, and came to a cost of just over $73,000.

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  • He was joined by the company CFO, buying 5,000 shares. Two directors have also been buyers in recent days, each picking up 10,000 shares in the low $8 range. This cluster of insider buying has occurred as shares have been cut nearly in half in the past month.

    The last insider activity occurred in July 2019, when some C-suite executives made some sales.

    The share drop occurred as Hindenburg Research released a report suggesting that the company’s plastic recycling operations are largely a fraud. The company has posted a response denying the allegations, but the market sees the response as weak.

    Action to take: Share buying from insiders at a time when the company is being hounded by a short seller is usually a good sign. Another good sign is that insiders already own over 70 percent of shares, so their additional buys, no matter how small, are a sign of confidence in a higher share price ahead.

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  • With shares deeply oversold on a technical level, traders should expect a bounce here. The January 2021 $7.50 calls are at-the-money and had a bid/ask spread of around $1.50, making for an inexpensive way to bet on a move higher in the coming weeks.