These 3 Companies’ Insiders Ignore Wall Street’s Doomsayers

Cullen/Frost Bankers Inc. (NYSE:CFR) is another company that registered a sizable insider purchase in the past several days. Director Carlos E. Alvarez purchased 40,000 shares on Friday at prices that fell between $47.00 and $47.40 per share, boosting his overall holding to 370,000 shares. Just recently, the financial and bank holding company reported its financial results for the fourth quarter of 2015, which were positively received by the market despite missing analysts’ expectations on earnings. It should be noted that Cullen/Frost Bankers has high exposure to the energy sector, which has adversely impacted its financial performance in 2015. The company did not have concentrations of loans related to any industry of more than 10% of total loans except for the energy industry; energy loans accounted for 15.7% of the company’s loans on September 30. Furthermore, the company had potential problem loans with eight borrowers on September 30, while nearly 41% of the total outstanding balance of potential problem loans was related to two borrowers in the energy industry.

Going back to the freshly-released earnings report, Cullen/Frost reported net income of $56.2 million for the fourth quarter, as compared to earnings of $70.7 million reported a year ago. Even so, the company’s full-year net income increased 0.5% year-over-year to $271.3 million. The shares of Cullen/Frost have lost 31% over the past year, thus lowering the company’s valuation to attractive levels. The stock is trading at a forward P/E multiple of 9.30, which compares with the average forward P/E of 10.7 for the regional banks industry. The number of hedge funds tracked by Insider Monkey with positions in the company climbed to 15 from 11 during the third quarter. Ken Fisher’s Fisher Asset Management owns 239,859 shares of Cullen/Frost Bankers Inc. (NYSE:CFR) as of the end of September, 2015.