Peter Warwick, President and CEO of Scholastic Corporation (SCHL), recently bought 1,674 shares. The buy increased his position by 2%, and came to a total cost of $50,997. He was joined by the company’s Chief Strategy Officer, who bought $50,430 in shares on the same day.
Warwick was the last buyer of shares at the company in September 2022, when he bought 3,245 shares for just over $100,000. There have been two insider sales in the interim.
Overall, Scholastic insiders own 21.2% of shares.
The children’s book publishing company is down 27% over the past year. That’s about in-line with the 10% drop in revenue that Scholastic faced, as well as the 53% decline in total earnings.
Even with that drop, shares still trade at 19 times forward earnings, and at about a 10% discount to their book value.
Action to take: Shares may be a worthwhile speculation here. Shares hit a new 52-week low in early July but are now starting to trend higher.
Currently, Scholastic pays a 2.5% dividend. However, that dividend is 200% of the company’s earnings, and may be cut in time, so buyers may just want to target low double-digit returns in the coming months.
For traders, the December $35 calls, last trading for about $2.25, could see mid-double-digit returns or better on a share rebound in the weeks ahead. Traders will likely want to take 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.