Red Rock Resorts Inc (NASDAQ: RRR) CEO and 10% owner Frank Fertitta has been busy buying shares of his company in recent weeks. This is the first purchases made in nearly a year as the stock is moving higher. While his purchases are significant, he’s also not the only one in the company buying large blocks of the company’s stock.
Red Rock closed 4.53% higher on Thursday as the stock has advanced in 13 of the last 14 days and the price rallied form $11 to over $17. Yesterday’s movement saw the price close above the June 5 high and may be an indication that the price may retest the February high.
Beyond the price, the insider activity helps to build the bullish thesis. So far, the month of August has seen 4.39 million shares bought for a total value of $64.1 million in value. The list of insiders buying shares are the CEO of the company, Frank Fertitta, and the Vice President Lorenzo Fertitta. The additional shares represent a significant addition their holdings. It is also the first insider buying activity since October 2019.
Action to Take: The current price level is overbought and there is potential that the price could pullback in the near-term. However, that’s not a certainty and the reward-to-risk is still attractive if the price tests the 2020 high.
Speculators may want to consider buying the 15 JAN 21 17.5/22.50 long call vertical for around $1.70.