Michael Mahoney, a director at CVS Health (CVS), recently bought 30,000 shares. The buy increased his position by a massive 190%, and came to a total cost of just over $2 million.
Mahoney was a buyer of over 9,100 shares last May, for just over $500,000. Another director also picked up 1,000 shares around the same period. Going back further, insiders were equally buyers and sellers of shares at a price near where CVS shares trade today.
Overall, CVS Health insiders own 0.4% of shares.
The pharmacy and drugstore chain is down 14% over the past year. Operationally, CVS has had a mixed year. Revenues have increased by about 4%, but overall earnings growth declined by 20%.
Consumers have been spending less on goods, although pharmacy services have been holding steady.
Following the stock’s mixed year, CVS trades at about 11 times forward earnings and 0.2 times its price-to-sales, a sign that shares may be a value play here.
Action to take: CVS shares bottomed out in December and have been trending higher. So both value and momentum investors may like shares here. CVS could possibly see low double-digit returns over the coming months.
Plus, at current prices, CVS also pays a solid 4.0% dividend.
For traders, with shares trending higher, a call option trade like the June $70 calls, last trading for about $3.10 could see mid-to-high double-digit returns.
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.