Aside from hedge fund moves, tracking insider purchases is very important to our investment strategy. Therefore, in this article, I will look into two small-cap U.S. regional banks that witnessed insider purchases over the past few weeks.
One of these companies I would like to refer to is First Financial Bankshares Inc (NASDAQ:FFIN), a $2 billion market cap financial holding firm. Since the beginning of the year, the company has seen at least 12 insider purchases take place:
– The most active insider has been Johnny Trotter, one of First Financial Bankshares Inc (NASDAQ:FFIN)’s Board Directors. Starting on Jan. 31st, and through 8 different purchases, he added more than 12,500 shares to his holdings (both direct and indirect holdings), having paid prices ranging from $59.40 per share, to $62.00 per share. His most recent transaction occurred last Friday, when he acquired 7,100 shares of the company. He now owns more than 195,000 shares of the company, worth more than $12 million.
– The second-runner amongst insiders was another Board Director: Hamilton Murray Edwards. Between Jan. 29th and Feb. 3rd, he bought more than 1,500 shares of the company, for prices between $59.80 per share and $62.40 per share. He now owns about 75,000 shares of the firm.
– Finally, there’s Ronald Giddiens, who on Jan. 2nd, procured 49 shares of the company for $64.77 each.
Despite the bullishness seen here and the firm’s above average margins and returns, analysts don´t seem to like this stock. I, myself, find it quite overvalued (check valuation). However, a more attractive entry point could become available soon. The company’s growth prospects make it an investment worth considering for the long-term, plus a 1.73% dividend yield makes your wait worthwhile.
Opinion amongst hedge funds is also quite divided. While prominent investor Israel Englander during the previous quarter initiated a position with 10,700 shares of the company, and Cliff Asness and Ken Griffin increased their stakes to 17,500 and 54,800 shares, respectively, others like Paul Tudor Jones sold out their positions.
The second case I would like to observe is that of Boston Private Financial Hldg Inc (NASDAQ:BPFH), a $1.1 billion market cap bank holding company which saw two insiders buy its stock since the beginning of 2014.
Mark Thompson, CEO at the Boston Private Bank business, acquired, on Jan. 31st around 18,000 shares of the company for $12.42 each. He currently owns more than 493,500 Boston Private Financial Hldg Inc (NASDAQ:BPFH) shares, valued at $6.8 million.
The other insider trade was registered last Thursday, when Eugene Colangelo, Board Director, acquired nearly 7,400 shares of the company for $13.51 apiece. Following this transaction, the Director holds some 139,900 shares.
Although most price targets indicate very little upside potential for the short term, this stock could deliver above average growth figures over the next five years. A 2.35% dividend yield makes it attractive for income-seeking investors, while its valuation just slightly surpasses its peers’ mean. With several hedge funds, including Chuck Royce‘s Royce & Associates (1.38 million shares) and Matthew Lindenbaum‘s Basswood Capital (1 million shares), not only betting on the company, but increasing its stakes in it, should you give it a shot as well?
Disclosure: Javier Hasse holds no position in any stocks mentioned
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