Grab This Bargain Even Cheaper Than Director Debbink Did

Posted: Dec 23 2013, 9:36am CST | by , in News


There’s an old saying on Wall Street about insider buying: there are many possible reasons to sell a stock, but only one reason to buy. Back on November 22, Cincinnati Financial Corp.’s Director, Dirk J. Debbink, invested $10,000.00 into 191 shares of CINF, for a cost per share of $52.41. Bargain hunters tend to pay particular attention to insider buys like this one, because presumably the only reason an insider would take their hard-earned cash and use it to buy stock of their company in the open market, is that they expect to make money.

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In trading on Monday, bargain hunters could buy shares of Cincinnati Financial Corp. (NASD: CINF) and achieve a cost basis even cheaper than Debbink, with shares changing hands as low as $52.10 per share. It should be noted that Debbink has collected $0.42/share in dividends since the time of their purchase, so they are currently up 0.2% on their purchase from a total return basis. Cincinnati Financial Corp. shares are currently trading up about 0.2% on the day. The chart below shows the one year performance of CINF shares, versus its 200 day moving average:

Looking at the chart above, CINF’s low point in its 52 week range is $38.41 per share, with $53.14 as the 52 week high point — that compares with a last trade of $52.13. By comparison, below is a table showing the prices at which insider buying was recorded over the last six months:

Purchased Insider Title Shares Price/Share Value
07/29/2013 Michael J. Sewell CFO, Sr Vice Pres & Treasurer 3,000 $49.03 $147,090.00
08/30/2013 Dirk J. Debbink Director 219 $45.68 $10,000.00
11/22/2013 Dirk J. Debbink Director 191 $52.41 $10,000.00

The current annualized dividend paid by Cincinnati Financial Corp. is $1.68/share, currently paid in quarterly installments, and its most recent dividend ex-date was on 12/16/2013. Below is a long-term dividend history chart for CINF, which can be of good help in judging whether the most recent dividend with approx. 3.2% annualized yield is likely to continue.

CINF makes up 3.37% of the KBW Insurance Portfolio ETF (AMEX: KBWI)

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Source: Forbes

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