Insiders sell shares for a variety of reasons, but only buy for one reason-- and that is to make more money. Below are financial stocks that have recently had strong insider buying from $200,000 to over $20 million.
JPMorgan Chase (JPM) is a worldwide financial conglomerate that has been in existence for almost 200 years since its founding in 1823. This Dow behemoth has since grown to churn over $90 billion annually in sales and a market capitalization at approximately $185 billion. The stock has performed well as it sits just about 5% from its $51.0 52-week high. Board director James Crown sees the stock apparently moving higher. From April 19-22 he bought collectively an astounding 436,859 shares equating to over $20.5 million worth of stock. The company has been performing well as it has smashed consensus estimates in each of the last four quarters. Moreover, the company still trades at a relatively cheap .95x price to book. Perhaps most importantly, management just recently raised the dividend yet again and now has it sitting at a nice 3.1% yield. I think this stock is worth a look and if wisely looking to diversify, Wells Fargo (WFC) is definitely worth a look.
Wells Fargo is no slouch in size as well, with an annual revenue base and market capitalization at $80 billion and $200 billion respectively. The company perhaps most notably has the nice distinction of being the largest holding of Warren Buffett's Berkshire Hathaway (BRK.B). Like JPMorgan, the company has beaten consensus analyst estimates in each of the last four quarters. The company trades at a considerable premium of 1.3x price to book, however, that is somewhat justified as the firm has superior margins and returns on assets. Lastly, the company also sports a rising 2.7% dividend yield making this a nice income holding.
Bank of America (BAC) is another massive financial firm with annual revenues near $80 billion and a $135 billion market capitalization. The company is also right near its $12.94 52-week high and board director David Yost sees it moving higher. He purchased a sizable 20,000 shares on April 18, raising his total ownership considerably to just over 64,000 total shares. The company did just miss consensus estimates in the most recent quarter, but did exceed them in the prior three. In addition, the company trades at a comparatively cheap .6x price to book, but worth noting that it does have significantly lower returns on assets and equity compared to the two firms mentioned above. The virtually zero dividend payout has me turned off though, and I think fellow financial giants U.S. Bancorp (USB) and Goldman Sachs (GS) serve as a better investment.
U.S. Bancorp is another financial giant that lists Berkshire Hathaway as a major shareholder. The company is considerably smaller than the firms mentioned above with an annual revenue base of $17.5 billion and market capitalization just over $60 billion. However, the company has considerably better operating margins of over 45% and returns on equity exceeding 14%. In addition, it has a growing 2.4% dividend yield which at only a 27% payout ratio, should continue to grow.
Goldman Sachs is another massive firm with annual revenues annual revenues near $35 billion and a $70 billion market capitalization. The company has been in business since 1869 and has established itself since that time as one of the most premier financial services company. Operationally, the company has vastly exceeded consensus estimates in each of the last four quarters which is always encouraging. Moreover, trading at just 1.0x price to book is pretty reasonable for such a well-known and respected company. Lastly, its 1.4% dividend at just a 13% payout ratio has me thinking that will be raised again in the near future making it a stock worth a look for the income investor.