Christian Brickman, President and CEO of Sally Beauty Holdings (SBH), recently picked up 10,000 more shares. The buy increased his stake by just over 2 percent, and came to a total purchase price of just over $189,000.
This is the second insider buy of the year, also from the company President and CEO. Overall, insiders have been massive buyers over the past three years, with only a handful of insider sales. Both executives and directors have been buyers.
Despite the massive buys, company insiders own 1.25 percent of shares.
The cosmetics company has seen shares rise over 63 percent in the past year, nearly double the return of the S&P 500. While revenue growth has been rebounding strongly, the company isn’t back to profitability yet, even as cosmetics sales have been rebounding with a reopening economy.
Action to take: Shares still look attractive after their recent run, with the company trading at about 9 times estimated forward earnings. However, shares don’t pay a dividend.
With a strong uptrend in place, traders should look at buying call options. The December $20 calls, last going for about $1.85, look attractive to play the current uptrend higher through the end of the year. The options can likely move in-the-money, so traders can buy multiple contracts and sell some on a move higher.
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.