Tarang Amin, a director at J.M. Smucker (SJM), recently bought 900 shares. The buy increased his position by 90 percent, and came to a total cost of $109,998.
The director was the most recent buyer with a 1,000 share buy back in December, at a cost of $125,050. Otherwise, company insiders have been moderate sellers of shares, with about half the sales coming from the exercise of stock options.
Overall, Smucker insiders own 3.5 percent of shares.
The packaged foods giant is down 20 percent over the past year. Snack food demand has dropped amid rising prices from inflation and the rollout of weight management drugs.
As a result, earnings have dropped 40 percent in the last 12 months, even as revenues have remained flat.
The low expectations for shares leaves Smucker trading at about 12 times forward earnings.
Action to take: On a valuation basis, shares look undervalued relative to the company’s various packaged food and pet food brands.
At current prices, investors can also get a 3.5 percent dividend, which Smucker has a history of increasing over time.
For traders, shares have been trending higher since October, but have pulled back in recent weeks. The longer-term uptrend may continue in the weeks ahead.
The July $135 calls, last trading for about $2.95, could see mid-to-high double-digit returns in the coming weeks.
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 company mentioned in this article.