Lo Thomas M., the Executive Vice President and Chief Administrative Officer of Cathay General Bancorp (NASDAQ:CATY), recently sold 900 shares of the company's common stock. The transaction, which took place on October 30, 2024, was executed at a price of $47 per share, amounting to a total sale value of $42,300. Following this transaction, Lo retains ownership of 3,359 shares in the company. This sale was documented in a Form 4 filing with the Securities and Exchange Commission.
In other recent news, Cathay General Bancorp reported a stable Q3 with a modest increase in net income and earnings per share. The net income rose to $67.5 million, a 1% increase from the previous quarter, while diluted earnings per share grew to $0.94. The bank also announced plans to continue its stock repurchase program, aiming to buy back approximately $35 million in stock per quarter through the first quarter of 2025, subject to market conditions.
Despite an earnings per share shortfall, Cathay General Bancorp maintained its Market Perform rating from Keefe, Bruyette & Woods. The firm cited increased credit costs due to a rise in non-performing loans as the primary reason for the shortfall. However, the bank's active management of its capital allocation, including its share buyback strategy, was seen as a positive move.
In response to these developments, Keefe, Bruyette & Woods adjusted its earnings projections for Cathay General Bancorp, reducing its earnings estimates for 2025 and 2026 by 1% and 2%, respectively. This adjustment reflects a more conservative outlook on the bank's net interest income.
InvestingPro Insights
The recent stock sale by Cathay General Bancorp's Executive Vice President comes at a time when the company's shares are trading near their 52-week high, according to InvestingPro data. This aligns with the significant price uptick observed over the last six months, with the stock showing a 32.83% total return during this period.
Despite the executive's decision to sell, Cathay General Bancorp maintains a relatively attractive valuation with a P/E ratio of 11.54, suggesting the stock may still be reasonably priced compared to earnings. Additionally, the company boasts a dividend yield of 2.96%, which may appeal to income-focused investors.
InvestingPro Tips highlight that Cathay General Bancorp has maintained dividend payments for 34 consecutive years, demonstrating a commitment to shareholder returns. However, it's worth noting that the company suffers from weak gross profit margins, which could be a factor for investors to consider alongside the recent insider sale.
For a more comprehensive analysis, InvestingPro offers 8 additional tips for Cathay General Bancorp, providing investors with a deeper understanding of the company's financial health and market position.
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