Arik Ruchim, a major owner at Six Flags Entertainment Corp (SIX), recently bought 250,000 more shares. The buy increased his holdings by nearly 3 percent, and came to a total cost of just over $9.3 million.
He was joined by another major owner who picked up 100,000 shares on the same day, paying out $3.65 million to do so. The company President and CEO bought 80,000 shares earlier in November as well, paying $3.35 million.
Overall, insiders have been far more active on the buy side than the sell side in the past year, and company insiders own 2.3 percent of shares.
Shares have dropped heavily in the past week as the Omicron variant has led to fears of more shutdowns and a reduction in in-person events such as theme parks like those offered by Six Flags.
Action to take: Shares are reasonably priced at 16 times forward earnings. The parks are seasonal, and the summer months have shown a lull for Covid activity, so a rebound in shares is likely in time. Traders can possibly see a big jump on a rebound here, although they should beware the company’s high debt load.
For traders, the April $40 calls, last going for about $2.15, offer a way to play a rebound in shares in the coming months without going too far out or paying too high a strike price.
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.