Trian Fund Management, a major holder at Invesco (IVZ), recently picked up 3,724,600 shares. The buy increased the fund’s stake by just over 7 percent, and came to a total price of just over $86 million.
The buy comes as the fund bought nearly 10 million shares back in March, paying more than $210 million for that stake in total. Going further back, company insiders have been regular sellers of shares.
Overall, company insiders at the asset management firm own a scant 1.4 percent of shares.
The company has slid 17 percent in the past year, despite a nearly 80 percent increase in earnings. And thanks to a general downtrend in the stock over the past year, the company now trades at about 0.85 times its book value. Shares trade at 7 times current and forward earnings, a significant discount to the overall market right now.
Action to take: In addition to trading like a value play, shares yield about 3.2 percent at current prices. The dividend hasn’t changed in the past year, but with a 22 percent payout ratio, investors should see further increases in time.
For traders, the July $23 calls, last going for about $0.85, offer a double-digit return potential in the coming months on a rebound in shares. The hefty fund buying could indicate an announcement soon that could lead to a rally in 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.