Rosalind Brewer, CEO at Walgreens Boots Alliance (WBA), recently bought 10,000 shares. The buy increased her stake by 3 percent, and came to a total cost of $339,510.
This marks the first insider buy at the company in the past two years. The company’s Chief Medical Officer exercised stock options and sold shares late last year, as did a director. The sales slightly exceed the amount of this recent CEO buy.
Overall, insiders own 17.2 percent of shares.
The drugstore chain has seen shares drop by nearly 20 percent in the past year. Revenues rose by just 3 percent, and earnings slid by 20 percent.
Despite the recent drop in shares, the stock is reasonably valued. At current prices, shares are going for less than 8 times forward earnings. And Walgreens Boots Alliance trades at just 0.2 times its price to sales.
Action to take: Shares have started to trend higher in recent sessions, which may be the start of a new bull market. Plus, shares yield about 5.5 percent at current prices. The dividend can likely move higher over time, provided the company returns to profitability soon.
For traders, the July $40 calls, last going for about $0.55, could deliver high-double-digit returns in the coming weeks on a further rally in Walgreens shares.
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.