Alan Colberg, a director at US Bancorp (USB), recently bought 10,000 shares. The buy increased his position by over 1,000 percent, and came to a total cost of $341,380.
This marks the first insider buy at the regional bank in over two years. Otherwise, company executives, including the company CEO and CFO, have been regular and steady sellers of shares, largely after stock options have vested.
Overall, insiders own 0.2 percent of shares.
The regional bank has lost about one-third of its value over the past year, as rising interest rates have weighed on stocks. Plus, the bank trades at about 1.2 times its book value, at a time when other banks trade at a discount.
US Bancorp is one of the larger regional plays out there, with a market cap of $55 billion. It could be a takeover target, but potential buyers are few. It’s more likely the bank itself will continue to grow and acquire smaller banks in the years ahead.
Action to take: US Bancorp is inexpensive at less than 8 times forward earnings. And the most recent dividend payout works out to a 5.7 percent yield. That’s a fair reward relative to the potential swings amid a weak economy and rising interest rates, but investors should wait for the drop in shares to stop first.
For traders, the current trend is down. The September $30 puts, last going for about $2.55, offer mid-double-digit gains on a further decline 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.