Edie Ames, a director at Cheesecake Factory (CAKE), recently added 4,000 shares. The buy increased his holdings by 47 percent, and came to a total cost just over $129,000.
Insiders have previously been buyers going back to last August, all from company directors. Going further back, there have been some insider sales by company executives in 2021, at prices about 50 percent higher than where the stock trade today.
Overall, company insiders own about 7.2 percent of the restaurant chain.
Revenue is up about 4 percent in the past year. Although the company hasn’t been profitable in the most recent quarter, shares are going for about 11 times forward earnings. Cheesecake Factory shares are also trading for about 0.5 times sales, down from 0.8 times a year ago.
Action to take: Shares are valued fairly attractively here, and the company pays a 3.3 percent dividend at current prices. There’s likely more upside as concerns over inflation fade and consumers increase spending at restaurants again.
For traders, shares have been gradually heading higher since the summer. The April 2023 $35 calls, last going for about $3.15 offer high double-digit returns in the coming months on a further move higher for the underlying stock.
The options also stand a strong chance of moving in-the-money, so traders may want to take quick profits on such a move to free up capital for other trades.
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.