Sumitomo Mitsui Financial Group, a board member of Jefferies Financial Group (JEF), recently opened a new position in the company with a 9,247,081 share buy. The cost of the buy came to $551,773,323.
Jefferies insiders have been sellers of shares this year, with the company CEO selling 1.5 million shares back in April for over $65 million. And the company CFO sold over 280,000 shares in May, netting nearly $13 million. Going further back, another major holder was a seller in 2023.
Overall, Jefferies insiders own 21.8% of shares, and institutional investors own another 68.7% of shares.
The investment banking giant is up 67% over the past year, aided by a hefty 60% jump in revenue growth and soaring earnings of over 1,180%.
Even with improving profitability, shares trade at about 15 times forward earnings, a solid discount to the overall market. And the financial giant has over $48 billion on its books in cash, more than its debt and more than enough to cover a financial emergency.
Action to take: Investors may like shares here, as they pay a 2.2% yield, which has a history of growing over time, and because the stock remains in an uptrend.
For traders, the December $65 calls, last trading for about $2.30, could see mid-double-digit returns on a continued rally through year-end.
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.