James Larson, a director at Ames National Corp (ATLO), recently picked up 1,300 shares. The buy increased his stake by just under 4 percent, and came to a total value of around $30,000.
A number of other insiders also acquired shares around the same time, in amounts ranging from $3,500 to $5,000, in what looks like an options exercise. Company insiders, both directors and officers, have been accumulating shares over the past three years with no insider sales.
Overall, company insiders own about 1.5 percent of shares.
The Iowa-based regional bank has seen double-digit earnings and revenue growth in the past year, even as low interest rates have somewhat impacted the potential for bank earnings. The bank’s most impressive financial metric is its profit margin, standing at 35 percent.
The bank also trades right around its book value, a conservative measure for a bank stock. Typically small banks are acquired by larger players at 1.2 times book or better, so there could be potential for a buyout here.
Action to take: Investors may like shares, given the company’s steady profitability and 4.5 percent dividend yield at current prices. The company also has a history of raising its payout over time.
Given the small market cap and relatively low volatility, no options trades exist for the stock at this time, so traders will have to look elsewhere to play a likely continued rally in bank stocks.
Disclosure: The author of this article has no position in the company mentioned here, but may make trades after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.