Seeking Alpha
Long/short equity, insider ownership
Profile| Send Message| ()  

The Financial Select Sector SPDR ETF (XLF) was trading as low as $5.88 in March 2009. The index is currently trading at $19.97 or 239.6% above the low made in March 2009.

(click to enlarge)

In this article, I will feature one bank that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.

  2. The stock is sold by no insiders in the month of intensive purchasing.

  3. At least two purchasers increase their holdings by more than 10%.

KeyCorp (KEY) operates as the holding company for KeyBank National Association that provides various banking services in the United States. KeyCorp bottomed at $4.40 in June 2009 and is currently trading at $12.26 or 178.6% above the low made in June 2009. KeyCorp has underperformed the Financial Select Sector SPDR ETF since March 2009.

(click to enlarge)

Insider buying by insider (last 30 days)

  • Richard Hipple purchased 3,000 shares on August 20 and currently holds 3,000 shares or less than 0.1% of the company. Richard Hipple serves as a director of the company.
  • Alexander Cutler purchased 10,000 shares between August 12-20 and currently holds 20,000 shares or less than 0.1% of the company. Alexander Cutler serves as a director of the company.
  • Donald Kimble purchased 17,000 shares on August 9 and currently holds 17,000 shares or less than 0.1% of the company. Donald Kimble joined KeyCorp as chief financial officer on June 3, 2013.

Insider buying by calendar month

Here is a table of KeyCorp's insider-trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
August 201330,0000
July 201300
June 201300

There have been 30,000 shares purchased and there have been zero shares sold by the insiders since June 2013.

Financials

The company reported the second-quarter financial results on July 18 with the following highlights:

Revenue$1.0 billion
Net income$193 million
Book value$10.89 per share
Tangible book value$9.77 per share

Competition

KeyCorp's competitors include Bank of America Corporation (BAC) and U.S. Bancorp (USB). Here is a table comparing these three companies.

CompanyKEYBACUSB
Market Cap:11.21B156.42B68.66B
Employees:15,197257,00064,486
Qtrly Rev Growth (yoy):0.040.07-0.01
Revenue:4.06B78.11B17.58B
Operating Margin:0.310.170.46
Net Income:804.00M5.01B5.52B
EPS:0.880.462.95
P/E:14.0431.8212.64
PEG (5 yr expected):3.060.851.32
P/S:2.711.973.85

KeyCorp has the second lowest P/S ratio among these three companies. Bank of America has seen insider selling during the past 30 days.

Conclusion

There have been three different insiders buying KeyCorp and there have not been any insiders selling KeyCorp during the last 30 days. All three of these insiders increased their holdings by more than 10%. KeyCorp has an insider ownership of 0.20%. There are nine analyst buy ratings, 17 neutral ratings and three sell ratings with an average target price of $12.51. KeyCorp is trading at a P/E ratio of 14.04 and a forward P/E ratio of 12.14. KeyCorp has a book value of $10.89 per share and the stock has a dividend yield of 1.82%. I believe the stock could be a good pick at the book value of $10.89 per share.

Source: Insiders Are Buying KeyCorp