Jane Scaccetti, a director at Penn National Gaming (PENN) recently added 1,975 shares. The buy increased her stake by over 4 percent, and came to a total price of just over $98,000.
This marks the first insider buy at the company in the past year, since the same director picked up 820 shares at a cost of just over $99,000. Otherwise, company directors and executives have been big sellers of shares over the past two years.
Overall, insiders own 1.6 percent of the company’s shares.
The resort and casino operator with 41 properties in 19 states has seen shares drop by nearly 60 percent over the past year. However, over that same time revenues have risen 53 percent and earnings have soared 305 percent. The stock now trades at 19 times forward earnings, making it look relatively inexpensive in today’s markets.
Action to take: Shares look undervalued here relative to the company’s growth, and current valuation following its underperformance over the past year. While the stock could perform well, shares don’t pay a dividend at the moment.
For traders, the June $55 call, last going for about $3.90, looks like an interesting trade here. On a move higher in shares, traders can likely nab a mid-to-high double-digit gain, likely within the coming weeks as current market fears start to wane.
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.