Insider Trading Report: Petco Health and Wellness (WOOF)

Ron Coughlin, Chairman & CEO of Petco Health and Wellness (WOOF), recently picked up 46,600 shares. The buy increased his stake by just over 22 percent, and came to a total price of just over $1 million.

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  • This is the first insider buy since shares went public near the start of the year. At the start of trading, a number of company insiders made some smaller buys. Large owners have been sellers of shares, mostly back in June.

    Overall, company insiders own just over 46 percent of shares.

    The stock has lagged somewhat since its IPO, down 26 percent overall. The pet store retailer offers over 1,450 locations, including 137 full care veterinary hospitals.

    Action to take: Shares look somewhat undervalued to today’s markets at about 25 times forward earnings. And, earnings are up 909 percent over the past year and revenues are up nearly 19 percent.

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  • Higher profit margins can come with continued growth, which could lead to a rise in share growth. However, the stock doesn’t pay a dividend at this time.

    Shares may have started a new uptrend in mid-August. If so, a call options trade is a more attractive way to play an uptrend here. The December $22.50 call is a near-the-money trade last going for about $2.30. It offers mid-to-high double-digit returns in the months ahead.

     

    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.

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