National Amusements Inc, a major holder at Paramount Global (PARA), recently added 646,764 shares. The buy increased the company’s stake by just over 2 percent. The company paid just under $21 million to make the buy.
This is the first insider activity at the company since the summer of 2020. Over the past three years, company insiders have largely been buyers when there has been insider activity.
Overall, company insiders own about 5.4 percent of shares.
While shares have lost a quarter of their value, earnings have been cut in half in the past year. But revenue has been flat, and shares trade at 11 times forward earnings. The stock trades at 0.9 times book value, a significant discount to the listed value of their intellectual property.
Action to take: Shares are inexpensive relative to the company’s intellectual property, and shares pay a 3 percent dividend yield at today’s levels. As an inexpensive player in the media space, shares stand to see excess returns in the coming years.
For traders, the September $35 calls, last going for about $2.55, could potentially deliver mid-to-high double-digit gains in the coming months. Traders may want to scale into the trade and take some partial profits on a rally to take advantage of current market volatility.
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.