An Insider Bought Shares of M&T Bank

M&T Bank’s peers include KeyCorp (NYSE:KEY), PNC Financial Services (NYSE:PNC), Signature Bank (NASDAQ:SBNY), and Fulton Financial Corp (NASDAQ:FULT). PNC and KeyCorp trade at a discount to M&T on a trailing basis, though the gap is narrow in both cases: their P/E multiples are at least 11 in each case. Betas are higher- above 1 for both banks. KeyCorp’s business was about flat in its most recent quarter compared to the same period in the previous year, but PNC recorded strong financial gains and may be worth looking into. Signature and Fulton, meanwhile, reported double-digit growth rates in their earnings last quarter compared to the fourth quarter of 2011. The two banks carry trailing earnings multiples of 20 and 15 respectively, however, and while analysts expect higher growth over the next couple years M&T is still a bit cheaper on a forward earnings basis. As a result we’d lean towards recommending it as a better value than these peers.

Oftentimes we don’t follow the reasons for an insider purchase, though M&T Bank turns out to have a case as a value stock. Its business is doing well- in absolute terms it would qualify for value status based on its earnings multiples and growth rates- and while it is not quite as cheap as larger banks it may be better positioned for a downturn. Investors may be interested in doing more research on the stock.

Disclosure: I own no shares of any stocks mentioned in this article.