Insider Activity Report: Charles Schwab (SCHW)

Charles Ruffel, a director at Charles Schwab Corp (SCHW), recently added 833 shares. The buy increased his holdings by 3 percent, and came to a total cost of $50,440.

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  • This is the first insider sale since March, when a different director bought 5,000 shares. Other company insiders were active buyers in March as well, including the company CFO, co-CEO, and President. There have been two sales from the company’s board chairman in May and July.

    Overall, company insiders own 6.3 percent of shares.

    The brokerage firm is down nearly 25 percent over the past year. Last year’s bear market and slow rally start this year have led to reduced trading, which has kept a lid on revenues.

    The drop has taken the Schwab from about 23 times earnings, in line with the overall market, to a slight discount at 17 times earnings.

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  • Action to take: Long-term investors may like shares here. Financial brokerages are somewhat cyclical to market events, and investors who buy now can sell during a hot market. Schwab currently yields about 1.8 percent as well, and the dividend has been recently increased.

    For traders, shares have been trending lower in the past few weeks but look oversold and ready to move higher. The October $60 calls, last going for about $2.40, could see mid-double-digit returns in the months ahead.


    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.

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