Steven Lykken, a Group VP at Hormel Foods Corp (HRL), recently bought 4,904 shares. The buy increased his stake by 15%, and came to a total cost of $159,246.
This is the first insider activity since September ,when three company insiders were sellers of shares. Going further back, the most recent insider buy was an 830 share pickup back in June for an even $25,000. Insiders have mostly been sellers over the past two years.
Overall, insiders at the processed food company own about 0.2% of shares.
Hormel shares are up just 4% over the past year, far lagging the overall stock market. While Hormel has managed to grow earnings by 9%, overall revenues are down by 2%, suggesting a continued struggle as consumers grapple with inflation.
The stock also trades at about 20 times forward earnings. That’s a slight discount to the overall market, but is a bit pricey for a business such as processed foods.
Action to take: Shares have started to trend higher in recent weeks, so momentum investors may like shares here. The stock has another 10% or so to gain before it could potentially meet resistance at its old 52-week high.
At current prices, Hormel also pays a 3.7% dividend.
For traders, the January 17, 2025 $35 calls, last trading for about $0.25, could see high double-digit returns on a continued rally in the coming weeks.
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.