Insider buying really slowed last week. Consumer confidence dipped last week, and it looks as if corporate confidence agrees with Main Street. Only 53 companies, as we measure it, reported records from directors and executive team members buying.
But that doesn't mean there aren't companies worth highlighting. This week insider focus is Huntington Bancshares Incorporated (NASDAQ:HBAN). Huntington is a multi-state diversified regional bank holding company. Through its subsidiaries, including its bank subsidiary, The Huntington National Bank (the Bank), Huntington is engaged in providing full-service commercial, small business, consumer banking services, mortgage banking services, automobile financing, equipment leasing, investment management, trust services, brokerage services, customized insurance programs, and other financial products and services.
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Last week, two HBAN insiders with previous activity headed to the open market, just like you and me, and purchased shares directly and indirectly (trusts, spouse account…). Chairman and Chief Executive Officer, Stephen D. Steinour and Director, David Porteous bought a combined 16,712 shares for a total investment of $156,945. That works out to an average price of $9.39, which means you can own regional bank a little cheaper!
Both men, as we mentioned already, have previous HBAN transactions, but we'll focus on the CEO. Unlike Porteous who only bought stock, Steinour bought and sold. In October 2012, he bought stock at $6.32, again in January 2013 at $7.04, February 2013 at $6.80, and in April 2013 between $6.94 and $7.49.
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Steinour's next move was to sell $118,749 of HBAN at $8.85 per share in February 2014 – maybe he wanted a fully-loaded Tesla Model S? Who knows? Nonetheless, he turned a profit from previous buys. What catches iStock's attention is the change of heart as the CEO reversed sentiment and resumed buying.
It's fascinating to note that the pair of buyers, both of whom are sitting on profits from earlier activity, added more Huntington stock with HBAN trading at/near five-year highs for price-to-book (P/B) and price-to-sales (P/S) ratios.
Since 2009, the Columbus, Ohio based bank's average P/B ratio was 1.06. Today, investors are paying 1.31 times book, which isn't all that far from the half-decade high of 1.46. Meanwhile, the P/S range for the past five-years is 0.45 to 3.17 times sales with a norm of 1.84. Today, the company is trading with a price-to-sales ratio of 2.86.
Considering the history of HBAN heading higher after Porteous and Steinour stepping in, the pair must not be too concerned with current P/B and P/S levels. Perhaps, it's the 2.2% dividend that attracts the men. At the moment, Huntington pays a dividend of $0.20 per, but it has been slowly rising since March 2009. In 2008, the annual dividend was $1.06 per share. It's possible that shareholders could be in-line for significant raises if the Midwest bank's fortunes continue to improve.
Overall: Porteous and Steinour have been steady believers in Huntington Bancshares Incorporated (NASDAQ:HBAN). Their continued buying, despite elevated valuations, has to give shareholders confidence that more is to come from HBAN; perhaps in the form of higher dividends down the line.