Richard King, a director at Huntington Bancshares (HBAN), recently picked up 2,178 more shares of the company. The buy increased his holdings by nearly 3 percent, and came to a total price of just over $30,000.
This is the second buy at the regional bank year-to-date. The prior buy was also from a director. Company executives have been regular sellers of shares over the past three years, with the net result of large sales by insiders overall.
Overall, company insiders own about 0.9 percent of shares.
Shares of the bank have dropped 11 percent in the past year, even as revenues have grown by 51 percent and earnings by 27 percent over that same time. And the bank has gone from trading at nearly 2 times book value to 1.2 times book value, a far lower premium to the value of the loans on the bank’s books.
Action to take: The bank is starting to look interesting at today’s prices. The stock now goes for under 10 times forward earnings.
If the bank can continue growing, it may even increase in value, even though short-term macro headwinds are weighing heavily on banks right now. Plus, today’s investors can get a starting dividend yield of 4.6 percent with a history of growth.
For traders, shares look undervalued and ready to pop.
The October $15 calls, last going for about $0.60, offer mid-to-high double-digit returns on any move higher in shares in the coming weeks. Traders should look for a quick profit in this environment and move on to the next trade.
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.