Daniel Heinrich, a director at Dollar Tree (DLTR), recently bought 1,000 shares. The buy increased his holdings by 19%, and came to a total cost of $127,850.
This marks the first insider activity of the year. Insiders were generally buyers last year, including buys of over $1 million from the company CEO and $200,000 from the company CFO. A major holder also acquired a stake worth over $99 million.
Overall, Dollar Tree insiders own 0.3% of shares.
The discount retailer has lost about 10% over the last year. Rising costs caused the company to lose money last year, even as revenues rose by 12%.
Retailers are also contenting with slower spending after years of above-average inflation, and shrinkage has been on the rise.
At current prices, Dollar Tree is fairly valued, at about 19 times forward earnings. If the company can improve its margins and reduce losses, it can swing to profitability, a move that markets tend to like.
Action to take: Investors may like shares here, following the pullback after the latest earnings report. At current prices, Dollar Tree does not pay a dividend.
For traders, the September $150 calls, last trading for about $4.60, could see mid-double-digit returns in the coming months on a rebound from the most recent selloff.
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.