It has been quite the two weeks in the markets.
We have experienced two of the biggest bank failures in U.S. history and Credit Suisse (CS) is now in the hands of archrival UBS Group (UBS) , creating a behemoth with some $5 trillion in assets. The shares of First Republic Bank (FRC) soared 30% in trading Tuesday as that regional bank explores ways to raise capital, and Treasury Secretary Yellen made some encouraging comments about potentially further backstopping the system if necessary.
The SPDR S&P Regional Banking ETF (KRE) rallied nearly 6% on the day and more positive investor sentiment on the regional bank space was a key factor in Tuesday's rally.
Insider selling in Silicon Valley Bank (SIVB) prior to that bank's implosion has come under investor and congressional scrutiny recently. On the flipside, there has been a notable increase in insider purchases across the financial sector during the recent spike of volatility across the banking space.
Here are a few names insiders are giving a nice vote of confidence in as worries about the banking system have spiked:
It was good to see a few insiders purchase just over $1 million worth of shares in aggregate over at PNC Financial Services Group (PNC) . This was the first insider buying in the stock in nearly a year and came immediately after the implosion of Silicon Valley and Signature Banks (SBNY) . Citigroup (C) also upgraded the name to a Buy from a Neutral rating 10 days ago with a $175 price target. The stock goes for roughly nine times earnings and sports a dividend yield north of 4.5%.
Insiders have been even heavier buyers of Charles Schwab Corp (SCHW) . Numerous officers of the firm have added more than $7 million to their holdings collectively since the second and third largest bank failures in U.S. history. Goldman Sachs ($75 price target), Credit Suisse ($68 price target) and Deutsche Bank ($83 price target) have also reiterated "Buy" ratings on Schwab in the last week.
New York-based regional financial institution Valley National Bank (VLY) also is experiencing a notable uptick in insider buying. Myriad insiders have bought just over $2.5 million in total of new equity since the recent rupture in the banking system. The stock trades at roughly seven times earnings and a 4.4% dividend yield.
Finally, we have SoFi Technologies (SOFI) , a fintech that offers various financial products and platforms. It's CEO has picked up just over $1.2 million of additional shares in the firm over the past two weeks. While still unprofitable, the company is experiencing annual revenue growth in the mid to high twenties.
While I am only incrementally adding to my exposure to the financial sector after the recent turmoil, watching what insiders are buying seems a good place to start for new potential trade ideas.
