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Insiders Stockpiling Shares of These 3 Companies

CIT Group Inc. (NYSE:CIT) has seen high insider trading activity on the buy side in recent days, with four insiders acquiring shares this week. To start with, Chairman and Chief Executive Officer John A. Thain bought 50,000 shares on Thursday at $27.31 apiece and currently holds a direct ownership stake of 486,849 shares. Vice Chairman Ellen R. Alemany snapped up 19,000 shares on the same day at prices ranging from $27.24 to $27.32 per share, lifting her overall stake to 87,656 shares. Moreover, Vice Chairman Steven Mnuchin acquired a new stake of 114,623 shares on Thursday at prices that fell between $27.26 and $28.10 per share. He also holds 530,920 shares through the Steven T. Mnuchin Dynasty Trust and 1.59 million shares through the Steven T. Mnuchin Revocable Trust. Last but not least, Director Alan L. Frank purchased 2,000 units of common stock on Thursday for $27.72 each and currently owns 6,675 shares.

The provider of financing, leasing and advisory services to middle market companies has seen its stock decline by more than 39% over the last year. The shares of the company are down by 30% in 2016 alone, which probably prompted activist hedge fund Hudson Executive Capital LP to pressure a potential break up of CIT Group, according to the Wall Street Journal. CIT Group began to be regulated by the Federal Reserve after the acquisition of OneWest Bank last year, which also means that the Fed has to approve the company’s buyback and dividend plans. It should be mentioned though that the stock is currently trading at an extremely attractive forward P/E multiple of 7.58, which compares with the ratio of 12.1 for the financial sector. Billionaire John Paulson of Paulson & Co. initiated a new position in CIT Group Inc. (NYSE:CIT) during the third quarter, consisting of 7.00 million shares as of September 30.

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The insider buying activity at Radian Group Inc. (NYSE:RDN) has also been extremely high this week, as seven different insiders bought shares on Wednesday alone. Non-Executive Chairman Herbert Wender purchased 5,000 shares at exactly $10.00 apiece and currently owns 187,670 shares. Chief Executive Officer Sanford A. Ibrahim snapped up 25,000 shares for $10.11 each, lifting his stake to 206,825 shares. According to a separate Form 4 filing, Chief Accounting Officer and Senior Vice President Catherine M. Jackson bought a 34,000-share block at an average price of $10.19 and now holds 61,673 shares. An additional 7,500 shares were purchased by Executive Vice President and General Counsel Edward J. Hoffman, who currently owns 34,911 shares. He bought these shares at $10.05 apiece. Next up is Executive Vice President and Chief Financial Officer J. Franklin Hall, who doubled his overall stake to 10,000 shares. Executive Vice President and Chief Risk Officer Derek V. Brummer purchased 14,000 shares at a price of $10.25 per share, while Director Howard B. Culang acquired 3,200 shares for $10.23 each. The latter currently holds a stake of 8,050 units of common stock, while the former owns 24,913 shares.

The exploding insider buying activity at the provider of mortgage and real estate products and services comes after the company released its fourth quarter and full-year 2015 financial results towards the end of January. The stock has lost 36% over the past 12 months, which has pushed the company’s valuation to extremely attractive levels. For instance, the stock trades at a forward P/E ratio of only 6.00, while the Property and Casualty Insurance industry as a whole has a forward P/E multiple of 11.4. Lee Ainslie’s Maverick Capital holds an ownership stake of 11.85 million shares of Radian Group Inc. (NYSE:RDN) as of the end of the third quarter.

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Disclosure: None

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