Harry Sloan, a director at Lions Gate Entertainment (LGF.B), recently added 50,000 shares to his holdings. The buy came to a cost of $649,000 exactly.
This marks the first insider transaction of the year. Another director was a steady buyer throughout 2021 and 2020, and the last insider sale occurred back in early 2019, so company insiders have generally been buyers of shares at the company.
Overall, insiders own just under 2.8 percent of shares.
Shares of the entertainment production company are just slightly down over the past year. While unprofitable, shares are valued at about 16 times forward earnings. The stock also trades right around its price to book value, and at a price-to-sales ratio just under 0.8, suggesting a moderate undervaluation here.
Action to take: Shares look like an interesting play here as an undervalued company. That may take time to unlock, which makes it easier to be an investor compared to a trader. However, shares don’t pay a dividend right now.
For traders, the June $15 calls, last going for about $1.05, look like an interesting potential trade here. If shares continue trending higher as they have over the past few months, the option could deliver mid-to-high double-digit returns. Traders should look for any weakness in shares to take early profits on the trade.
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.