William Green, a director at Arbor Realty Trust (ABR), recently bought 10,209 shares. The buy increased his stake by 7%, and came to a total cost of $132,026.
This marks the first insider buy this year. Company insiders were substantial buyers last year, with a cluster of insider buys last November. That included purchases from the company CEO and CFO, who each bought shares in multiple transactions.
Overall, Arbor Realty Trust insiders own 2.5% percent of shares.
The mortgage REIT is up 20% over the past year.
That’s lagged the overall market, but in a tough environment for interest-rate sensitive investments, Arbor has held up well, nabbing a massive 52% profit margin.
Shares trade right at their book value, and may have more room to run. At current prices, shares still trade cheaply, at just 7 times forward earnings.
Action to take: There may be further upside for shares later in the year as interest rates continue lower.
As a REIT, Arbor has to pay out over 90% of earnings as income. At current prices, Arbor pays a massive 13.3% dividend yield. As long as earnings continue, the payout is sustainable.
For traders, shares have been flat in recent weeks but should trend higher as interest rates start to decline. The January 2025 $15 calls, last trading for about $0.70, can leverage such a move with mid-to-high double-digit returns.
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.