Mary Lindsey, a director at Methode Electronics (MEI), recently bought 8,800 shares. The buy increased her stake by 31%, and came to a total cost of $100,108.
The buy came a week after another director bought 9,320 shares, also paying in the low $100,000 range, and after a $500,000 buy from the company CEO. These mark the only insider buys over the past two years, although there have been some slight sales by Methode insiders.
Overall, Methode insiders own 5.7% of shares.
The electronic device company has seen shares get cut in half over the past year.
Methode has struggled operationally over the past year, failing to turn a profit and seeing revenues drop by 10%.
However, on a valuation basis, shares appear inexpensive, trading for about 14 times earnings and about half their book value, plus about 0.4 times their price-to-sales.
Action to take: Shares are starting to show signs of life and have started trading higher in recent weeks. The stock could be a surprise winner over the months ahead if this trend holds. That makes shares a speculative play now.
At current prices, Methode also pays a 5% dividend.
For traders, options are limited, but the January 2025 $12.50 calls are an at-the-money trade. Last going for about $1.50, the options could see high double-digit returns if shares continue to see positive price action.
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.