Insider Trading Report: Charles Schwab (SCHW)

Walter Bettinger, CEO at Charles Schwab (SCHW), recently bought 50,000 shares. The buy increased his holdings by 8 percent, and came to a total cost of $2.965 million.

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  • He was joined by a number of other company officers and directors. The company’s CFO bought 5,000 shares, at a cost of just under $297,000. One director bought 10,000 shares, paying just under $568,000. The buys come just a few weeks after the last insider sales at the company.

    Overall, company insiders own 6.1 percent of shares.

    The recent spate of buys comes as fears about the solvency of the banking system caused shares to go from $80 to the mid-$50 range in just a few days.

    At current prices, the investment brokerage firm trades at 17 times forward earnings, down from 24 times last year. And shares have lost a third of their value, even as revenues and earnings grew by double-digits in the last year.

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  • Schwab’s growth at a time of slowing retail trading is a sign of the company’s astute execution, which can also be seen by the company’s 35 percent profit margin.

    Action to take: Shares may be worth a speculative buy now, with the potential to add to that stake on any more selloffs related to fears about the banking system. At current prices, shares also yield about 1.5 percent, with a low payout ratio that could see further growth.

    For traders, the June $70 calls, last going for about $3.35, offer mid-to-high double-digit returns 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 of the companies mentioned in this article.