Daniel Heinrich, a director at Dollar Tree (DLTR), recently bought 2,200 shares. The buy increased his stake by 22%, and came to a total cost of $150,194.
The director last bought shares back in March, paying nearly twice as much per share for just 1,000 shares at a cost of $128,000. Insider trading has otherwise been mixed, with the company’s CIO selling shares in July, but the company CFO bought 1,800 shares in April.
Overall, Dollar Tree insiders own 0.1% of shares.
The discount retailer has shed 43% of its price over the past year. Earnings are down by 33%, even as revenues are up 0.7%. The impact of rising costs is weighing on shares, as is a pullback on consumer spending at places such as dollar stores.
While the stock has taken a hit, shares now trade at 0.5 times their price-to-sales. And Dollar Tree shares now trade for about 12 times forward earnings.
Action to take: Dollar Tree shares are in a downtrend, and recently fell lower after poor earnings. Investors should look for stronger signs of a rebound than one director buy before building a position in shares here.
For traders, the October 18 $65 puts, last trading for about $2.15, could see mid-double-digit returns on further weakness over the next few weeks, which also encompasses the market’s worst-performing period of the year.
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.