William Jurgensen, a director at Lamb Westin Holdings (LW), recently bought 10,000 shares. The buy increased his position by 6%, and came to a total cost of $554,291. He was joined by another director who bought 5,000 shares, at a cost of $277,476.
These are the first insider transactions of 2024. The last insider activity was last October, with a buy for 3,000 shares. Going further back in 2023 and 2022, insiders were more likely to be sellers.
Overall, Lamb Westin insiders own 0.7% of shares.
The producer and seller of frozen potato products is down 42% over the past year.
Revenues are down about 5% over the past year, as consumers have cut back on spending, even on grocery staples, amid higher prices. Lamb Westin has also seen earnings collapse by 74%.
Despite that drop, shares trade at 15 times forward earnings, and has pushed the company’s dividend up to 2.4% compared to a five-year average yield of about 1.2%.
Action to take: Given the steep drop in shares, reasonable valuation, and insider buying now, shares are a speculative buy here, with an eye towards low double-digit returns by the end of the year, including the dividend.
For traders, with shares ready to tend higher, the December $70 calls, last trading for about $2.55, could see mid-to-high double-digit returns. That’s no small potatoes.
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.