James Craigie, a director at Newell Brands (NWL), recently bought 10,000 shares. The buy increased his holdings by nearly 46 percent, and came to a total cost of just over $133,000.
This marks the first insider buy at the company since mid-2021. Company directors have been sellers of shares this year until this latest buy. Over the past three years, insider buying has far exceeded insider selling.
Overall, company insiders own 0.5 percent of shares.
Shares of the home goods manufacturer are down 47 percent in the past year. The move has occurred as revenues have sunk by 20 percent, and as earnings growth has dropped by a staggering 83 percent.
With shares trading at 0.6 times their price-to-sales, and at under 9 times their price-to-earnings ratio, however, the stock could rebound sharply on an improvement in its earnings in the quarters ahead.
Action to take: Shares look like a value play here, near their 52-week low. Today’s buyers can also get a 6.9 percent dividend yield, which should hold steady unless the company’s business deteriorates further. Then there could be a risk of a cut, but that’s likely a few quarters away.
For traders, the March 2023 $15 calls, last going for about $0.55, offer mid-to-high double-digit return potential in the coming months, provided the company can show that its recent slump has ended.
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.