Charles Schwab Corp (SCHW) and Two Low-Priced Stocks Witness Robust Insider Buying

Charles Schwab Corp (NYSE:SCHW) is another company that witnessed insider buying this week. Director William S. Haraf acquired 4,000 shares on Wednesday at prices that ranged from $25.24 per share to $25.60 per share, and currently holds an ownership stake of 13,209 shares. The move comes after the company released its earnings report for the fourth quarter of 2015 earlier this week. The securities broker-dealer reported net income of $416 million for the period, up from $376 million reported for the third quarter of 2015 and $350 million reported for the fourth quarter of 2014. It is also important to note that the company’s clients opened 1.1 million new brokerage accounts in 2015, which denotes an increase of 10% year-over-year. Most importantly, as investors were faced with economic uncertainty due to increased market volatility, they were turning to advice offerings in greater numbers, especially during the third quarter. More than 155,000 accounts enrolled in one of the company’s retail advisory solutions last year, up by 60% year-over-year.

The shares of Charles Schwab have plummeted by nearly 26% since the end of 2015 and are down by 10% over the past year. Nonetheless, the stock trades at a rather expensive forward price-to-earnings ratio of 17.97, despite experiencing a sharp decline in recent weeks, compared to the average of 15.65 for the S&P 500 companies. A total of 48 hedge funds monitored by our team had long positions in the company at the end of September, amassing 8.30% of its outstanding common stock. Stephen Mandel’s Lone Pine Capital reported owning 13.40 million shares of Charles Schwab Corp (NYSE:SCHW) via its 13F for the third quarter.