Jeffrey Brown, a director at Rent-A-Center Inc (RCII), recently added 1,223 shares to his holdings. The buy increased his stake by just over 1.6 percent, and came to a total cost of just over $25,000.
The director last bought shares in April, paying about the same amount for only 962 shares. And other insiders have been active buyers in the past year as well, including a 40,000 share buy from the company CEO for just over $1 million back in March.
Overall, company insiders own about 10.4 percent of shares.
The stock has sunk over 60 percent in the past year. The company has a low profit margin right now, and may be in for some pain as the economy slows. However, shares do trade at less than 0.3 times sales, and the stock is going for less than 5 times forward earnings.
Action to take: Investors may like shares here. The stock has a high 6.6 percent yield, but the company is paying out all its earnings now, so a further decline in earnings could lead to a dividend cut down the line. However, the economy may rebound before that has a chance to happen.
For traders, the December $25 calls, last going for about $1.80, look like a solid play here. They may decline a bit in the coming weeks, but can likely rebound with markets later in the year. Traders can also potentially play the options on a shorter-term basis, buying on down days for the stock and selling on any subsequent 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.