Gavin Mohr, an EVP at Independent Bank Corp (IBCP), recently bought 800 shares. The buy increased his stake by 4%, and came to a total cost of $29,369.
This marks the first insider buy in over a year, following a director buy for 1,800 shares in May 2023, when shares were trading about 50% lower than their current price. Otherwise, IBCP directors and EVPs have been slight sellers of shares over the past 18 months.
Overall, Independent Bank insiders own 4.6% of shares. The regional bank is up 68% over the past year, more than double the returns of the S&P 500.
Operationally, the bank has struggled, with revenues down by 7% and earnings off by 21%. But an improving outlook for the banking sector, combined with a decline in interest rates over the next year, can likely help the bank rally back to profitability.
Action to take: Independent Bank shares trade at about 13 times forward earnings, suggesting there’s still further upside likely for shares, which remain in an uptrend.
Today’s buyers can also get a 2.5% dividend yield at today’s prices.
For traders, options are limited, but the January 2025 $40 calls, last carrying a bid/ask spread of about $1.60, could see mid-double-digit returns on a year-end rally higher for the bank stock. Traders may want to take profits at the start of the year.
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 company mentioned in this article.