Buy Bank Stocks, but which ones? - Bill Ackman
At Autopilot we like to follow the money of other smart investors. So when Bill Ackman tweets this, we study it:
Bank stocks collapsed two days ago and quickly recovered today. The setup was beautiful for anyone who was following the sector. When Silicon Valley Bank went under, the entire market freaked out and sold off banks to basement level lows. Once high-quality banks that were trading at 2.0x book value were sold off to 0.10-0.20x book value. Equity markets were essentially saying these franchises were better off dead than alive.
Anyone who was a rational thinker and investor was able to take advantage of the opportunity and make a significant return in less than 24 hours. After the fallout of bank stocks from just Monday, bank stocks recovered significantly on Tuesday. And it makes sense, anything trading for that level of book value usually means it is just too cheap. A quick reversion to the mean is bound to happen.
There was a significant amount of insider buying in beaten down bank stocks over the past three days. We found a list of these bank transactions floating around on the internet. We thought it would be helpful to share it.
Bank stocks likely remain extremely volatile in the future. We think the best way to own a stock this volatile is to buy the ones that are seeing big insider purchases or the basket of ETF’s. At the end of the day, an insider purchase is almost perfect insider information. When an insider eats their own cake, they are implicitly stating that everything is fine.
Here is the comprehensive list of insider buying in bank stocks and which ones saw the biggest inflows:
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