Insider Trading Report: Jefferies Financial Group (JEF)

Melissa Weiler, a director at Jefferies Financial Group (JEF), recently bought 4,000 shares. The buy doubled her holdings, and came to a total price of just under $150,000.

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  • This is the second buy from the director since last July, when other insiders, including the company President, were buyers as well. Otherwise, company insiders have largely been sellers of shares in sizeable blocks over the past three years.

    Overall, insiders own just under 24 percent of the company.

    Shares of the investment banking conglomerate have been a strong performer, with the stock up 45 percent in the past year, just more than double the returns of the S&P 500.

    Action to take: Shares look attractive here. Besides high insider ownership, shares trade at less than 11 times forward earnings, and the bank trades at about 0.9 times its book value, a conservative valuation measure for a financial stock.

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  • And the recently-raised dividend offers investors a starting yield of about 3.2 percent here, with the prospect of further increases in time given the low payout ratio.

    For traders, the long-term uptrend in shares has been halted by the recent market fears. A reversal higher in the coming months could help send shares to new highs. The June $40 calls are a near-the-money trade that last went for about $1.90. The calls could potentially deliver mid-to-high double-digit returns in the coming months on a rebound 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.

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