Richard Schulze, Chairman Emeritus at Best Buy Co (BBY), recently picked up 250,000 shares. The buy increased his holdings by about 1.1 percent, and came to a total purchase price of $19,900,000.
The buy is notably large, as company insiders have generally been sellers of shares over the past three years. Typically, company insiders will sell around 10,000-15,000 shares in their largest blocks, against some modest insider buys of as few as 10 shares.
Overall, insiders, led by Schulze, own 10.8 percent of the company.
Shares of the electronics retailer are down about 27 percent in the past year. Profit margins have been tight, and earnings have stalled out following a massive rise during the pandemic. However, even with the drop in operational performance, the company is trading at 8.4 times forward earnings, on the inexpensive side for a retailer, even now.
Action to take: Investors may like shares here. The company has been growing its dividend payment while keeping the payout ratio low. Shares currently offer a 4.2 percent yield at today’s prices, with room for more increases down the line.
For traders, the September $90 calls, last going for about $5.30, can deliver mid-to-high double-digit gains in the coming weeks on a further rebound in shares. Traders should look for a quick profit from such a move in the short-term.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.