If you’re looking for potential trade ideas, keep an eye on insider buying.
Look at Charles Schwab (SYM: SCHW) for example.
Over the last few days, the stock dropped from about $75 to about $62. All after deposit outflows, downgrades and earnings.
In its second quarter, the company posted EPS of 73 cents, which was a penny above estimates. Revenue of $4.7 billion was in line. It also noted that “deposits fell 17% year over year to $252.4 billion. Net interest revenue also fell, dropping 6% to $2.16 billion for the quarter. Analysts had expected $2.17 billion,” as noted by Barron’s.
However, according to CEO Walt Bettinger:
“In the second quarter, people may have been disappointed that we were a couple of billion dollars less than they anticipated. But you’re talking about a $9.4 trillion base, a record base in assets. And June was a wonderful month to buy into the market, a lot of our clients did. So, their cash went down a little bit more than anticipated because they bought stocks.”
The CEO also put his money where his mouth is and bought 25,000 shares for just over $1.7 million on July 17 at an average share price of $66.26. President Rick Wurster also bought 10,000 shares for about $620,500 on July 17 at an average price of $62.05 a share.
Crisis is a buying opportunity with SCHW.
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Written by Ian Cooper