New York Community Bancorp (NYSE: NYCB) stock suffered another fall on Monday, but the drop wasn’t as severe as in some recent trading sessions. In what was more a price correction than anything else, the struggling lender’s share price eased by 0.2% following a bit of a rally the preceding Friday.
The insider buy high didn’t last long
That Friday pop was due to insider stock buying, as several New York Community Bancorp executives and members of its board of directors purchased shares of the troubled bank.
Chief among these buys was a 50,000-share purchase by the board’s executive chairman, Alessandro DiNello. Insider buys were also made by fellow board member Peter Schoels and the company’s president of mortgage Lee M. Smith, among others. All told, regulatory documents filed that day indicate these individuals collectively spent $870,000 on the bank’s stock.
That level of insider buying bolstered confidence in New York Community Bancorp’s beaten-down stock price, but only temporarily. It doesn’t address the fundamental problems revealed in the bank’s latest set of quarterly results, which featured an unexpected net loss stemming from significant net charge-offs. These derived from a pair of relatively sizable loans on its books.
Serious concerns remain
Other moves by New York Community Bancorp and entities tracking it are weighing heavily on investor sentiment. In order to shore up its finances, the bank slashed its dividend by a steep 70%; meanwhile influential credit rating agency Moody’s downgraded its long-term rating on the company to Ba2, its “junk” designation.
Should you invest $1,000 in New York Community Bancorp right now?
Before you buy stock in New York Community Bancorp, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and New York Community Bancorp wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of February 12, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Moody’s. The Motley Fool has a disclosure policy.
Why New York Community Bancorp Stock Slumped on Monday was originally published by The Motley Fool