Rehan Jaffer, a major holder at Six Flags Entertainment (SIX), recently added 525,000 shares. The buy increased his holdings by 5.5 percent, and came to a total price of $12.5 million.
He was joined by company director Arik Ruchim, who also bought 525,000 shares for about the same amount on the same day. The two major holders were last big buyers of shares back in May. The company CFO has also been a modest buyer in the past few months.
Overall, company insiders own 1.4 percent of shares. Major owners take that share ownership north of 30 percent.
The theme park venue has seen shares slide 38 percent in the past year amid a decline in the overall stock market. Earnings are down about 35 percent compared to the prior year, although revenue is down just 5 percent.
Action to take: The steep decline in shares relative to the drop in share price has taken the company to just 10 times forward earnings. That makes for an inexpensive way to play one of the leading theme park properties today. At present, the company does not yet pay a dividend.
For traders, the January $30 calls, last going for about $2.35, offer mid-to-high double-digit returns in the coming months if the company continues higher from 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.