Insider Buying Points to Rebound for 3 Battered Finance Stocks

KeyCorp (NYSE:KEY) has seen nine different insiders make big purchases so far this week, which is the kind of insider trading behavior individual investors should pay close attention to. So let’s take a look at the most noteworthy purchases. To begin with, Chairman and Chief Executive Officer Beth E. Mooney purchased 20,000 shares on Monday at a cost of $11.22 per share and currently owns 494,861 shares. Director Alexander M. Cutler snapped up 15,000 shares on the same day for $11.21 each, lifting his overall holding to 35,000 shares. William G. Gisel Jr., a member of the company’s Board, acquired 13,000 units of common stock on Tuesday at $10.86 apiece and now owns 17,900 shares. 15,000 shares were also purchased by Director Charles P. Cooley, who currently holds a 20,000-share stake. These shares were acquired at a price of $10.95 per share. Director Ruth Ann M. Gillis bought a 12,900-share stake on Tuesday at a price tag of $11.04 per share, which is held in a trust fund for the benefit of her children. The Director also holds a direct ownership stake of 11,700 shares.

The exploding insider buying activity comes after the financial services company released its earnings report for the fourth quarter. The shares of the company have lost 15% over the past year and trade at extremely attractive P/E ratios. The company has a forward P/E multiple of only 7.69, which might serve as an explanation for the increased insider buying at the company. There were 35 hedge funds tracked by Insider Monkey which were invested in the company at the end of September. Cliff Asness’ AQR Capital Management reported owning 19.80 million shares of KeyCorp (NYSE:KEY) through its 13F for the third quarter.

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Simmons First National Corporation (NASDAQ:SFNC) is another company that had multiple insiders purchase shares this week. Senior Executive Vice President Marty D. Casteel purchased 500 shares on Tuesday at a price of $41.87 per share and currently holds a direct ownership stake of 54,757 shares. More noteworthy was Chairman and Chief Executive Officer George A. Makris buying a 10,000-share block on the same day at $41.07 apiece. After the recent purchase, the CEO currently owns a direct ownership stake of 126,292 shares. Last but not least, Executive Vice President Stephen C. Massanelli added 1,000 shares to his holding on Tuesday, which now comprises 11,840 shares. The 1,000 units of common stock were purchased at a price of $40.19 per unit.

The Arkansas-based financial holding company has seen its shares advance by 15% over the last year despite experiencing a significant pullback from the beginning of December through the end of last week, when the company released its financial results for the fourth quarter. The company reported record core earnings of $25.9 million for the quarter, which marked an increase of $14.5 million year-over-year. Its core earnings totaled $89.6 million for 2015, up by $50.9 million year-over-year. The company’s P/E multiples appear to suggest that its insiders are making the right decision by piling up more shares, so it remains to be seen whether the stock will deliver the expected performance in the upcoming months. Sharif Siddiqui’s Alpenglow Capital acquired a 45,400-share stake in Simmons First National Corporation (NASDAQ:SFNC) during the third quarter.

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