Amy Murray, a director at American Financial Group (AFG), recently bought 1,200 shares. The buy came to a total cost of $150,205, and increased her position by 55%.
This marks the first insider buy over the past two years. Otherwise, company insiders, including both executives and directors, have been sellers of shares on a regular basis. Most of those sales have occurred in a price range between $115 and $145, near where shares trade today.
Overall, AFG insiders own 18.0% of shares.
The property and casualty insurance company is up 3% over the past year, lagging the overall market. The company has performed better operationally, with earnings up 14%, and revenues up 10%.
Insurance companies tend to benefit from higher interest rates, as they invest their assets in fixed-income assets for security.
At current prices, AFG trades for 11 times earnings, about half the valuation of the overall stock market right now.
Action to take: Shares are near a six-month low, and could be ready to bounce higher from here over the coming months. Today’s buyers could likely see low double-digit returns through the end of the year.
AFG also pays a 2.3% dividend at current prices.
For traders, the September $130 calls, last trading for about $5.00, could see mid-to-high double-digit returns on a bounce higher over the summer.
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.