Michael Pegram, a director at Caesars Entertainment (CZR), recently added 25,000 shares. The buy increased his holdings by about 31 percent, and came to a total cost just over $1.18 million.
This is the first insider buy since June, when a number of directors also picked up shares. Over the past three years, insiders have mostly been active as sellers, with buying activity only picking up this year.
Overall, insiders own 0.4 percent of the company.
The casino operator has seen shares slide 57 percent in the past year as the economy has slowed down. The company has lost money in the most recent quarter, and revenue has only risen a scant 7.5 percent.
Casinos tend to be highly cyclical, so in an economic upturn, shares would likely soar higher. However, with consumers starting to cut back in a number of areas, casinos will likely be hit fairly hard.
Action to take: Until economic sentiment turns around, shares will likely be under pressure. Interested investors should look for an improving outlook before picking up shares, especially as Caesars doesn’t pay a dividend right now.
For traders, the short-term trend has been flat. The January 2023 $40 puts, last going for about $2.90, could potentially deliver mid-double-digit returns in the coming weeks on a dip in shares from here.
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.