Gary Kelly, a director at Lincoln National Corp (LNC), recently bought 7,169 shares. The buy came to a total cost of just over $200,000, and increased the director’s stake by 239 percent.
Another director made a 3,000 share buy in November, paying about $10 more per share, and paying just over $112,000. Otherwise, company insiders have been modest sellers of shares over the past three years, including the company CEO and CFO.
Overall, insiders own about 0.6 percent of the life insurance company’s shares.
Shares have been cut in half in the past year as LNC has reported some losses. And revenues are down 11 percent overall. Rising interest rates will benefit the company’s investments going forward, but will continue to impact the value of their investment portfolio.
However, shares also trade at 4 times forward earnings. And the company is inexpensive on a number of other metrics, including its price to sales and enterprise value.
Action to take: Investors may like shares here. LNC shares yield about 5.2 percent, and the company should have sufficient cash flow to cover the dividend, even if rising interest rates impact portfolio valuation.
For traders, shares have been trending higher since late September. The July $27.50 calls, last going for about $1.90, offer mid-double-digit returns on the continued gradual rally in shares 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.