Reed Hastings, Co-CEO of Netflix (NFLX), recently picked up 51,440 shares. The buy increased his holdings by just over 1 percent, and came to a total purchase price of $20 million.
This marks the first insider buy at the streaming entertainment giant since mid-2019. Over the past three years, company insiders have been regular sellers of shares, although the last insider sale was back in November before shares shed over one-third their value.
Overall, company insiders own just over 1.5 percent of the company.
Thanks to the steep slide in shares over the past two months, the stock is down 22 percent over the past year. While subscriber growth, the key metric for the streaming industry, has slowed, Netflix has still managed to grow revenue and earnings by double-digit levels.
Action to take: Shares are a potential rebound play here, given the company’s solid growth and now insider buying from the company Co-CEO. A focus on improving the company’s profit margin, currently at 17 percent, could help shares rally even further and offset slowing subscriber growth down the line.
For traders, a rebound in shares looks underway. While still in its early stages, traders could fare well buying the May $550 calls. Last going for about $12.75, traders could likely nab high-double-digit gains in the next few weeks if shares continue to rally.
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.