Marvin Riley, a director at Wolfspeed (WOLF), recently bought 1,866 shares. The buy increased his stake by 16%, and came to a total cost of $50,481.
This is the first insider buy since February, when a cluster of four directors bought nearly 10,000 shares each, at a cost of around $250,000 for each director. The last insider sale occurred last December, when the company CFO sold about 6% of his stake.
Overall, Wolfspeed insiders own 0.9% of shares.
The silicon carbide wafer manufacturer is down 47% over the past year, in stark contrast to the monster rally in the semiconductor sector as a whole.
Wolfspeed hasn’t been profitable over the past year, and managed to lose over $500 billion, even as revenues rose 4%.
Even though shares have been knocked down, the company has a large amount of cash on the balance sheet, and the company’s wafers area key component in particular for wireless communications chips.
Action to take: Shares have been trading around the same price since February, and may be forming a longer-term base from which to head higher.
Speculative investors may like shares here, especially given their higher return potential. Shares do not pay a dividend, so income investors should look elsewhere.
For traders, the September $30 calls, last trading for about $2.85, could see mid-to-high double-digit returns if shares start to trend up to the higher end of their trading range. Traders should look to take quick profits on any large one-day rally for Wolfspeed shares.
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.