Wayland Hicks, a director at Schnitzer Steel Industries (SCHN), recently added 2,000 shares. The buy increased the director’s stake by just under 2 percent, and came to a total purchase price of $61,700.
This marks the first insider buy at the company in the past three years. Company insiders, including both executives and directors, have been regular sellers of shares over the past three years, largely clustered around the issuance of stock options.
Overall, insiders at the company own 5.8 percent of shares.
The steel recycling and salvage company has seen shares slide by one-third in the past year. That’s even as revenue has grown 23 percent in the past year and earnings have risen by 17 percent. While that may slow in the coming year as commodity prices cool, shares still trade at about 5 times earnings.
Action to take: At current prices, shares yield just over 2.2 percent. While the dividend yield has held steady, the stock has a low payout ratio, so shares may be a worthwhile buy now. As a commodity play, the company will be highly cyclical, so investors might be able to get shares a bit lower before the market starts to turn around for an even higher starting yield.
For traders, option strikes and dates are somewhat limited. The February 2023 $45 calls, last going for about $2.30, could get a bit lower in the $2 range before heading higher. Traders may want to buy options as soon as a rebound in the market or the steel sector looks likely to best leverage the potential of shares here.
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.