Anne Crawford, a director at Farmers National Bank (FMNB), recently picked up 1,500 shares. The buy increased her holdings by 1.7 percent, and came to a total cost of just under $21,000.
This is the first insider buy since August. Company directors have been active buyers all year, mostly for trades in the $20-25,000 range. Company executives were also buyers earlier in the year. There have only been a handful of insider sales over the past three years.
Overall, company insiders own 8.4 percent of shares.
The regional bank has seen its shares drop 23 percent in the past year. Yet revenues are up 10 percent, and earnings are flat. As a result, the bank trades at about 9 times earnings.
Bank stocks have been declining in general this year, along with the rest of the market. But higher interest rates give the bank the chance to increase their profitability, even if new loans slow amid rising rates.
Action to take: Investors may like shares here. This bank pays a 4.6 percent dividend yield and that yield was recently raised. And with a 33 percent profit margin, the bank is likely to continue performing well operationally, which should eventually be recognized in a higher share price.
For traders, options are limited. But the March 2023 $15 calls, with a bid/ask spread of $0.45, are an inexpensive way to bet on a move higher in shares in the coming months. Traders can potentially nab mid-double-digit profits.
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.