Charles Johnson, a major holder at Franklin Resources (BEN), recently added 100,000 shares to his stake. The buy came to a total cost of $2.23 million, and increased his position by less than 1%.
This marks the first insider buy at the asset management company over the past two years. There have been a half dozen insider sales over the same time, mostly coming from company executives. The largest sale was for $1.6 million from the company CEO in mid-2022.
Overall, Franklin insiders own 46.3% of shares.
Franklin is down 11% over the past year. While asset managers have benefitted from higher interest rates, Franklin saw its overall earnings drop by one-third, even as revenues rose 12%.
However, the company now trades at about 0.9 times its book value, and shares are also trading for 8 times forward earnings, a significant discount to the overall market.
Action to take: Shares have started trending higher in recent days after hitting a 52-week low in mid-June. Investors may be able to see low-double-digit returns if the uptrend holds.
At current prices, Franklin also pays a 5.5% dividend.
For traders, the October $25 calls, last trading for about $0.45, could leverage a bounce higher in the coming weeks and see high-double-digit returns or better, depending on the extent of the rally. Traders can likely book profits well before expiration.
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.