Insiders are snapping up regional bank stocks following the crisis in the sector, according to a Raymond James analysis. Since the start of the crisis in March, net purchases among insiders have reached record levels, analyst Michael Rose wrote in a Monday note. During the period between March 10 and May 15, shares purchases totaled 2.3 million shares, while shares sold reached 335,000 shares. That’s a pretty rare occurrence, the analyst said. Since the first quarter of 2005 to the first quarter of 2023, only seven quarters notched positive net insider transactions. In fact, the last time net insider transactions were positive was in the first quarter of 2020, when stocks dropped during the start of the coronavirus pandemic. It’s also the greatest number of net insider transactions since the end of 2009. That shows growing confidence in a sector that has been in turmoil, with the SPDR S & P Regional Banking ETF lower by 32% this year. “Net-net, in our view, this bullish indicator reflects a combination of insider’s belief that the broad sector selloff is not indicative of the strength of their own franchises and that recent selling pressure is overdone,” Rose wrote. “We believe open market purchases by those with direct and in-depth knowledge of a company can express confidence in the stock (at current prices), credit performance through this crisis, and/or a view of an improved competitive position, as management teams/Board members are putting their proverbial ‘money where their mouth is,'” Rose added. Raymond James surfaced stocks that have seen the greatest insider activity since the start of the crisis. Here are the top 10. Raymond James has a strong buy rating on Texas Capital Bancshares . Since March 10, there have been 87,500 open market purchases. Shares are down 17% this year. Stellar Bancorp also made the list. Raymond James recently reiterated an outperform rating on the stock, citing its rising earnings power, though it also lowered its price target to $26. “Importantly, one of the major advantages of the deal is a large portion of its balance sheet has been marked, leaving it with one of the more liquid balance sheets in our coverage,” Raymond James’ David Feaster wrote in a May note. “In turn, it has been able to utilize its AFS book as a true liquidity portfolio and help fund deposit outflows, in addition to cash deployment and borrowings.” Lakeland Financial also surfaced on the list. The bank has an outperform rating from the firm. Since March 10, it has made 52,724 open market purchases. The stock is down 34% this year.
This story originally appeared on CNBC
