Insider Trading Report: Sally Beauty Holdings (SBH)

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  • Christian Brickman, President and CEO of Sally Beauty Holdings (SBH), remelt added 11,350 shares to his holdings. The purchase price came to just over $124,000 and increased his total stake by 2.5 percent.

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  • This follows a 10,000 share buy from the CEO in August, around the same time a director picked up shares as well. Insiders have been active throughout the year, with insider buys handily beating insider sales at the company.

    Shares of the cosmetics firm remain down 40 percent over the past year. Lockdowns and work-from-home trends have significantly reduced demand for cosmetics. Shares have been trending slightly higher since the announcement of a Covid vaccine earlier in the month.

    Action to take: Shares have been knocked down to 11 times earnings, 7 times forward earnings, and a price to sales ratio of 0.34. These are all impressive numbers from a valuation standpoint, and with a vaccine, in hand, represent a somewhat overlooked play on a return to a more open economy. The insider buys are also a good sign here.

    Investors could buy shares, which could head as high as $19, about a 75 percent return, on a return to the stock’s old 52-week highs.

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  • Traders can play the current uptrend with the March 2021 $12.50 calls. Trading with a bid/ask spread under $0.90, they’re an inexpensive trade that could move several dollars in-the-money on a big swing in shares. That could mean a triple digit gain with this trade.