CD&R Investment Associates IX, a major holder at Beacon Roofing Supply (BECN), recently added 108,056 shares. The buy increased the fund’s stake by 0.75 percent, and came to a total price of just over $6 million.
This marks the second buy from this fund this year, constituting the sole insider buys. Otherwise, company insiders, including directors and executives, have largely been sellers of shares, although their sales are far less than this fund’s purchases.
Overall, company executives and directors own just 0.6 percent of company shares.
Shares of the roofing supply company are up about 64 percent in the past year, even as the firm has struggled with profitability. Revenue is up 10 percent over the past year, however.
The roofing company tends to see shares spike higher when a hurricane threatens the Eastern Seaboard or Gulf of Mexico, and hurricane season tends to peak in the next two months.
Action to take: Shares are somewhat attractively valued at just under 15 times forward earnings, but investors will have to go elsewhere for the income of a dividend.
For traders betting on an active hurricane season, the December $60 calls could see a big spike higher. Last trading with a bid/ask spread around $2.40, traders would want to look to take profits off the table just before a big storm makes landfall, as that’s when shares tend to drop on hurricane-related movements.
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 of the companies mentioned in this article.