‘By the dip’ hasn’t become a ubiquitous phrase, it’s not without reason. Together bank stock With the recent consensus being that whether or not they are in danger of meeting the same fate as SVB and Signature Bank, there are plenty of ‘dip buy’ opportunities that investors can take advantage of right now.
And that’s what one CEO is doing. After seeing shares of his firm Charles Schwab plunge more than 30% since the crisis began, CEO Walter Bettinger said Tuesday he bought 50,000 shares for his personal account. Bettinger also said that he was not the only one to do so, claiming that the bank’s customers were also loading up on SCHW shares.
It seems that the buy action has not been reserved for online brokerages either. Elsewhere, bank insiders are busy scooping up shares of their own stock, apparently realizing that the pullback is too good to resist. If insiders are rising, it sends a strong signal to investors that they should have confidence that their company’s shares are undervalued.
In light of this, we steeped in Insider Hot Stocks Tool on TipRanks and three bank stocks declined, showing some strong insider buying activity. here are the details.
Fifth Third Bancorp (fitb,
Headquartered in Cincinnati, Ohio, Fifth Third Bancorp is one of the largest consumer banks in the Midwest. Operated through its subsidiary Fifth Third Bank, its customer base includes retail, small business and investment customers, the business is divided into several distinct segments: commercial banking, branch banking, consumer lending and wealth and asset management.
In Fifth Third’s most recent Q4 report, rising interest rates helped the company make a big expansion in interest margin — the difference between the bank’s rates for loans and its rates for deposits. Net interest margin (NIM) increased sequentially by 13 percentage points to 3.35%. Year-to-date, this figure was a significant 80 percentage points higher than the 4Q21 margin of 2.55%. The result is that net interest income grew 32% year over year to $1.6 billion. Additionally, while expenses increased by only 1%, reported income increased by 16% to $2.3 billion.
Like many other regional banks, FITB shares came under pressure after the bank collapsed, dropping 26% since the crisis began.
An insider decided it was time to pounce. Director Gary Hemminger loaded up in two blocks at the start of the week totaling 47,500 shares — now worth $1.19 million.
He’s not the only one showing confidence. Assessing the prospects of this bank, Scott Seifers of Piper Sandler highlights NIM as the factor that sets FITB apart.
“FITB looks to us as though it should be able to see an upward trend through this year,” the analyst said. “Moreover, it appears as though the company has positioned itself in such a way that it will be able to keep the NIM floor around 3.30% over the next few years even if rates fall by a few hundred bps. FITB’s The key differentiating factor, in our view, is the stability and flexibility in its NII trajectory … Within its current guidance, FITB impresses us as one of the best-positioned large regional players.
These comments form the basis of Cypher’s Overweight (i.e., Buy) rating, while its $40 price target leaves room for one-year returns of ~57%. (To see the track record of ciphers, Click here,
Elsewhere on Wall Street, the stock scored an additional 4 Buys and Holds, each, for a Moderate Buy consensus rating. Considering the average target price at $39.83, analysts like Seifer expect the shares to rise by ~57% in the coming months. (Look FITB Stock Forecast,
Stellar Bancorp (Estel,
Next up is another bank holding company. Stellar Bank, a subsidiary of Stellar Bancorp, is a Houston, Texas-based institution offering a wide range of commercial banking services. The bank primarily caters to small to medium sized businesses and individual customers located in Houston, Beaumont, Dallas and surrounding areas of Texas.
The bank is a new concern formed through merger of equals between Elegance Bank and Community Bank of Texas, NA. The merger becomes effective on October 1, 2022.
The company’s fourth-quarter results reflected a combined entity for the first time and showed a contrast between the top and bottom lines. Revenue grew 108.5% year-over-year to $126.25 million, which beat Street Calls by $6.16 million. However, the core EPS of $0.15 sorely missed the $0.72 consensus estimate.
Shares tumbled after the Q4 print and fell once again in the wake of the SVB debacle, though not as badly as other bank stocks that have lagged behind.
Still, two insiders clearly think the timing is right. On Monday, director Joe Swinbank bought 37,841 shares – currently worth $991,000, while director Joe Penland bought 10,000 shares worth $262,000.
Stephens analyst Matt Olney is also bullish on the stock, and points out a clear case for buying, as the potential gains clearly outweigh the risks. He writes: “With macro-uncertainty in mind, we believe STEL is well positioned due to its strong funding, excellent credit reputation and strong operational footprint in Southeast Texas.”
To this end, Olney maintains an Overweight (i.e., Buy) rating on STEL shares and supports it with a $38 price target. This suggests that shares will climb as much as 44% over the next 12 months. (To see Olney’s track record, Click here,
Other analysts supported Olney’s view. There have been 3 Buys and no Holds or Sells assigned in the last three months, so word on the Street is that STEL is a Strong Buy. The average price target of $34.33 puts the upside potential at 29.50%. (Look STEL Stock Forecast,
Coastal Financial (CCB,
The last bank stock we’ll look at is that of holding company Coastal Financial, which operates through its subsidiary, Coastal Community Bank. Headquartered in Everett, Washington, the company oversees 14 full-service branches in the Greater Puget Sound region. Small and medium-sized businesses, professionals and individuals all use Coastal’s full range of banking services, while through its CCBX division, Coastal also provides banking-as-a-service to broker dealers and digital financial services companies. Is.
The company’s revenue has been climbing at a fast pace and this was the case in the recent fourth quarter report as well. Revenue reached $96.24 million for a 147.2% year-over-year increase, while the company generated net income of $13.1 million, which equated to EPS of $0.96. This compares well to the net income of $11.1 million ($0.82) displayed in the previous quarter and the $7.29 million net income generated in 4Q21. The company ended the year with net assets of $3.14 billion, an increase of 19.3% compared to $2.64 billion by the end of 2021.
Nevertheless, the shares were unable to withstand the force of the banking downturn and recently took a hit in a series of sessions – plunging as much as 26% before posting a recovery.
4 C-suite members took advantage of the pullback, with the most notable purchase being director Steven Hovde. On Tuesday he bought 30,000 shares. His market value is currently over $1 million.
The stock also attracted the attention of David Fester of Raymond James, who wrote: “Given the strong growth outlook with defensive characteristics ahead of a potential credit cycle, we view the risk/reward favorably and do not believe current valuations Considers meaningful potential income. Power from its BaaS segment (CCBX). As it continues to validate business model through the cycle, we appreciate its highly profitable business model (+20% ROATCE) with minimal credit risk Many anticipate significant potential for expansion.
Based on that valuation, Feaster has a Strong Buy rating on CCB shares, supported by a $57 price target. Implications for investors? 59% above the current trading price.
Some stocks fly under Wall Street’s radar and CCB appears to be one of them right now; Feaster’s review is the only one on record. (Look CCB Stock Forecast,
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Disclaimer: The views expressed in this article are those of select analysts only. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.