George Johnson, a director at Helca Mining (HL), recently bought 8,500 shares. The buy increased his stake by 49 percent, and came to a total cost of $34,585.
This buy marks the only insider activity at the company over the past two years. Company officers have been granted shares of stock repeatedly over the past few years, but none have sold off their positions yet.
Overall, company insiders own 7 percent of shares.
The precious and base metal mining stock has been flat over the past year, slightly underperforming the overall stock market. Helca has operated at a slight loss over the past year, and shares are valued at nearly 80 times forward earnings.
However, one of the company’s mines is about to enter into production, which may help improve revenues and profitability in the quarters ahead.
Action to take: Shares have been in a downtrend, but are starting to look oversold, so investors could start buying here and adding on further drops lower. Helca is priced near its lowest valuation in years based on book value and growth potential. Shares pay a small 0.5 percent dividend as well.
For traders, with shares looking oversold, the December $5 calls, last going for about $0.25, could see high-double-digit returns or better in the months ahead.
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.