Edward Casey, a director at Flowers Foods (FLO), recently bought 5,000 shares. The buy increased his holdings by 33%, and came to a total cost of $117,750.
This marks the first insider buy since December, when the company CFO added 1,780 shares and the CEO bought 9,100 shares. Otherwise, insider activity has been mixed, as there have been some small insider sales by employees over the past year.
In total, Flowers Foods employees own 7.7% of shares.
The packaged baked goods company has seen shares drop 14% over the past year. Several factors at play, including investors shying away from packaged food companies over the past year amid the release of new weight-loss drugs.
Plus, rising costs have weighed on profitability. Even with the price decline, the drop in earnings has pushed Flowers Food’s valuation up to 40 times earnings.
Action to take: Shares have started to trend higher from what looks like a double bottom in November and December 2023. If the company’s operations start to look better from here, shares could be a strong winner.
At current prices, Flowers also pays a 3.9% dividend.
For traders, the uptrend in shares looks sustainable. The July $25 calls, last trading for about $0.40, could see mid-to-high double-digit returns in the weeks ahead on further upside in shares.
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.