Insider Trading Report: The Kraft Heinz Company (KHC)

Alexandre Van Damme, a director at The Kraft Heinz Company (KHC), recently bought 13.85 million shares of the company.

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  • The buy came to just over $420 million, and increased the director’s holdings by over 5,500 percent. The buy comes as 3G Global Food Holdings, a private equity firm and major shareholder, has shed nearly 29 million shares. The past few years have shown similar sales by 3G, with Van Damme picking up some of those shares.

    To find a non-3G/ Van Damme insider trade, one has to go back to 2018. Shares of the food giant are down about 2 percent over the past year. Company insiders own about 0.7 percent of shares.

    Action to take: The company is starting to see a strong earnings rebound, and the valuation is at 13 times forward earnings. Shares trade under book value as well. That’s a good starting point, and a better indication of a rally in share prices than this insider activity.

    Today’s shareholders can grab a 5.1 percent dividend yield. But options traders can likely leverage a 10-15 percent move in shares.

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  • The January 2021 $32.50 calls would move in-the-money if shares rose just under 10 percent. Trading around $0.38, they’re an inexpensive bet. Traders can likely grab 50-100 percent profits in the next few weeks just from the natural gyrations in shares, which would offer better returns than buying shares and collecting the dividend over the next year.