Marshall Lux, a director at New York Community Bancorp (NYCB), recently bought 27,100 shares. The buy increased his position by 55%, and came to a total cost of $99,891.
This is the first insider buy since a cluster of insiders bought shares in early February, including the CEO and CFO. The regional bank has been under pressure this year amid ongoing concerns of a weakness in the regional bank stocks.
Overall, NYCB insiders own 1.3% of shares.
Even with news of a capital infusion that will prevent the bank from being shut down by regulators, shares are off by 65% in the past year.
That’s pushed the bank’s valuation down to about one-third of its book value, a conservative measure of the value of the bank’s loans.
Plus, shares trade at 0.6 times their price to sales. And at less than 10 times forward earnings, all adding up to a potential value investment today.
Action to take: NYCB shares are a reasonable speculation given the additional capital to shore up the bank’s operation. Shares will likely also see some strength as interest rates come down later in the year.
NYCB also pays a 6.3% dividend at current prices, after cutting it by more than half in the past year.
For traders, shares may see a jump higher on any good news, or slide lower on any bad news.
The October $5.00 calls, last trading for about $0.25, could benefit from any good news leading to a share jump in the coming months.
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.