Jorgen Knudstorp, a director at Starbucks (SBUX), recently bought 380 shares. The buy increased his stake by 1%, and came to a total cost of $34,770.
This marks the first insider buy at the company over the past two years. Company insiders are regular sellers of shares, in particular the company’s North America CEO, who also recently resigned. Most of the sales were direct sales, with only one insider sale coming following the exercise of stock options.
Overall, Starbucks insiders own 2% of shares.
The coffee chain is up just 1% over the past year. Shares have been trading weakly on slowing same-store sales. Revenues are down about 1%, but overall earnings have declined by nearly 8%.
The stock has gotten a recent boost with the announcement of a new CEO who can potentially reverse that slowdown.
Currently, Starbucks trades at 24 times earnings, a bit pricey compared to the overall market.
Action to take: It’s possible that a turnaround could lead to shares trending higher over the next year, meaning investors who buy now or on any drop lower in the coming weeks could see a reasonable return. At current prices, Starbucks pays a 2.4% dividend.
For traders, shares are starting to show some signs of strength. The January 2025 $105 calls, last trading for about $3.45, could see mid-double-digit returns on a year-end rally for 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.