Dirk Debbink, a director at Cincinnati Financial Corp (CINF), recently bought 1,000 shares. The buy increased his stake by 2 percent, and came to a total price of $98,390.
This is the first insider buy at the company since last December, when the director bought 1,000 shares. Since then, another director has sold a small amount of their holdings. Over the past 3 years, there have only been two insider sales compared to ten buys.
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Cincinnati Financial has lost about 23 percent over the past year, as higher interest rates have weighed on asset valuation on the insurance company’s operations. As a result, the insurer lost money in the two most recent quarters.
However, revenues from insurance premiums are up, and interest rates are likely nearing their peak for this cycle, which could spur a turnaround for shares.
Action to take: Investors may want to consider shares at current prices or on any drop lower. At 20 times earnings, the company is fairly priced. Cincinnati Financial has been a dividend growth player for decades, and the current yield of 3 percent is slightly higher than its historical average.
For traders, the September $110 calls, last going for about $1.75, could see mid-double-digit returns in the coming months on a rally in shares.
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.