Joseph Nowicki, a director at Lumber Liquidators (LL), recently bought 6,274 shares. The buy increased his holdings by 258 percent, and came to a total purchase price of $150,000.
This is the first insider buy since last August. Since 2019, company insiders have been exclusively buyers. This is the first purchase from a director since 2014. Overall, company insiders own nearly 5 percent of the company.
Shares of the home improvement retail chain are up 217 percent in the past year, although shares have traded in a range since last August. Overall revenue is up over the past year, even as the company reported a slight drop in earnings.
Action to take: Earnings can likely improve if the company can pass on higher lumber costs to its customers. That should allow profit margins to expand as well. A move higher in shares to the 52-week high of $35 represents a 40 percent move higher from the current price of $25.
Shares pay no yield, so investors may want to look elsewhere in the home improvement retailer space to get paid to wait. With shares close to the low end of their 10-month range, a call option trade looks more attractive here.
The August $30 calls, trading for about $1.50, offer good upside relative to the downside. On a move back to $35 in the coming months, the calls could be worth $5 at expiration. Traders may want to take profits on a smaller move higher.
Disclosure: The author of this article has no positions in the stock mentioned here, and does not intend to make a trade on this company after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.