Marshall Lux, a director at New York Community Bancorp (NYCB) recently added 6,000 shares. The buy increased his holdings by over 72 percent, and came to a total cost just under $52,000.
This marks the first insider activity at the company since June, when another director picked up 25,000 shares, for just under $232,000. Over the past three years, company insiders have exclusively been buyers of the stock, and all buys have come from company directors.
Overall, insiders at the regional bank own 1.7 percent of shares.
The bank has shed one-third of its value in the current bear market, even as earnings have risen by 13 percent and revenues are up by 5 percent. Plus, at current prices, shares trade for about two-thirds their book value, or at a substantial margin of safety to the bank’s loans.
Action to take: Besides the strong conventional valuation here, shares also yield about 7.7 percent. While that dividend hasn’t been increased in the past year, it’s a high starting yield, and a rebound in stocks will likely take shares higher, so buyers can be well paid to wait.
For traders, the January 2023 $10 calls, last going for about $0.30, are a near-the-money trade that stand a strong chance of moving in-the-money in the months ahead. Traders can likely nab high-double-digit gains.
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.