Terrence Cavanaugh, a director at Selective Insurance Group (SIGI), recently bought 1,000 shares. The buy increased his stake by 6 percent, and came to a total cost of $98,470.
This marks the first insider buy since last June, when another director picked up 351 shares at a cost of $35,355. Otherwise, one director has been a seller of shares over the past year. SIGI’s President and CEO has also sold shares, to the tune of over $2.2 million in 2023.
Overall, SIGI insiders own 1.75 percent of shares.
The property and casualty insurance company is down 2 percent over the past year.
Insurance rates have been on the rise, which has helped profitability. Revenues are up 16 percent and earnings are up 44 percent.
However, the increases have also led customers to cut back on insurance needs. That could weigh on the sector going forward.
Action to take: SIGI is attractively priced at about 13 times earnings. Shares also pay a 1.4 percent dividend, which was recently increased.
With interest rates peaking, insurance demand may start to increase in the quarters ahead, making the stock a reasonable buy now.
For traders, shares are on the lower end of their trading range over the past year. The March $105 calls, last going for about $2.00, could see mid-double-digit gains.
The options are thinly traded, so traders may want to be cautious with SIGI and trade a smaller number of options than they usually do.
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.