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JUST AS INVESTORS ARE expressing grave doubts about the revival of America's megabanks, the chief executive officer of one of the country's biggest financial institutions is showing new confidence.
Brian Moynihan, the CEO of Bank of America (ticker: BAC), bought 30,000 shares in the bank on Monday for $391,000, or about $13.03 per share. Moynihan's purchases were the first he has made since he became chief executive in January 2010.
But before he became CEO, Moynihan made some well-timed share purchases. He bought about $300,000 in shares in late January and early February of 2009, when he was Bank of America's president of global banking and wealth management. He bought those shares for average prices between $3.89 and $6.14, less than half what the shares are trading for today. After his buys on Monday, Moynihan owns 453,727 shares, which accounts for less than 1% of the company's shares. He also owns more than 800,000 stock options.
Two other Bank of America insiders also stepped up with purchases in the past month. On Aug. 19, director Donald E. Powell, the former chairman of the Federal Deposit Insurance Corp., bought 10,000 shares for $131,000, or about $13.10 per share. Chief Financial Officer Charles Noski also bought 6,000 shares on July 22 and 23 for $82,000, or about $13.60 per share. Neither owns more than 1% of the company's shares.
Bank of America declined to comment.
The buys come at a time when the market has been punishing bank stocks amid low loan demand and fears of a double-dip recession. That makes Moynihan's buy particularly significant, according to one banking analyst.
"They get such a huge amount of options; it's always a surprise when they step back and decide to make a commitment to buy stock," says Richard Bove, a banking analyst at Rochdale Securities, who rates the shares at Buy. "People should look at his confidence in his own company."
Bove says the selloff in bank stocks is overdone, and he's hearing little from the management at financial institutions that would lead him to believe the industry is in serious trouble.
"We're in a situation where there's total panic again," he says. "These companies' stocks are hitting new lows on a daily basis. That's something that is quite frankly not merited by what the companies themselves are seeing within their own businesses."
Bank of America shares hit a new intraday low on Tuesday, falling to $12.59 before closing at $12.65, down 1.7% on the day. Shares have dropped 17% in the past three months, as rivals Citigroup (C) and JPMorgan Chase (JPM) fell 2% and 5%, respectively. Bank of America shares have slumped even though it has beaten analyst earnings expectations handily in the past two quarters. Beyond the difficult economy, Bank of America has also been hit by financial regulatory reform, which Moynihan said could cost the company $10 billion upfront and more than $4 billion in revenue per year.
Jonathan Moreland, research director at InsiderInsights.com, says the uncertainty in the economy would make him reticent to buy the stock, even though he considers Moynihan's buy to be quite bullish.
"This is a sizable percentage increase in his ownership," Moreland says. "But given my top-down fears, I'm not sure I'd follow the insiders into Bank of America." |
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发表于 2010-8-27 11:10 AM
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发表于 2010-8-27 11:33 AM
