Ron Coughlin, CEO & Chairman of Petco Health & Wellness (WOOF) recently bought 23,290 shares. The buy increased his holdings by just over 9 percent, and came to a total price of $400,000.
The CEO has made two prior buys in September 2021, each for 46,600 shares. The company CFO and another insider have also been buyers in the past two months, with the only insider sales since the company went public coming from some major fundholders.
Insiders own 46.4 percent of the company overall.
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The retailer of pet supplies and services such as veterinary services has seen shares shed one third in the past year, even as company insiders have remained bullish. Earnings have soared 1,450 percent, and revenue is up 14.5 percent, but profit margins have been low.
Action to take: Shares are relatively inexpensive compared to the overall market at 22 times forward earnings. If the company can increase its revenues and profitability, shares can likely rebound strongly given the solid valuation shares are now at following their selloff. The stock does not pay a dividend at present.
For traders, shares dropped lower toward the end of last year and have yet to find their footing. Traders could buy shares and sell covered calls to take advantage of this sideways move, or sell a put option like the June $17.50. Last going for about $1.75, the put option would allow traders to get paid now, and take on the risk of buying shares right near their 52-week low.
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.