Richard Davis, a director at Dow Inc (DOW), recently bought 5,000 shares. The buy increased his position by 17 percent, and came to a total cost of $255,437.
This marks the first insider activity since April, when another company director bought 400 shares for just under $22,000. Company directors have been steady buyers last year, and the company CEO sold a large block of shares following the exercise of a stock option.
In total, Dow insiders own 0.1 percent of shares.
The chemical producer’s stock is unchanged over the last year, underperforming the S&P 500. Demand for chemicals has been poor, with revenue down by 24 percent and earnings off by over 50 percent.
That’s pushed the company to 14 times earnings, and shares now trade at a 20 percent discount to their price to sales.
Action to take: While shares are flat over the past year, they’ve mostly been in a downtrend. That trend may resume after the seasonal holiday push higher.
Interested investors may want to hold off for now, looking to buy shares in the high-$40 range or under, closer to their 52-week lows. Shares pay a 5.4 percent dividend, but that could be cut as it’s higher than the company’s earnings right now.
For traders, the June 2024 $45 puts, last going for about $1.40, play to the stock’s longer-term downtrend. The option can likely see mid-double-digit returns between now and expiration, especially if there’s a spring 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 of the companies mentioned in this article.