Things That Make You Go Hmmm - Hudson Valley Holding Corp
Occasionally, I investigate some of the stocks that make the top 5 losers of the day on the CAPS homepage. Today, I spotted Hudson Valley Holding Corp on the list (HUVL.OB). It's down 13.25% for the day so I thought I'd check it out.
A quick look at the balance sheet doesn't reveal much. They have a low amount of Goodwill and Intangibles propping up their equity figure, but they claim a very low allowance for loan losses. If I raise their allowance closer to 10%, that wipes out nearly all their equity. This isn't necessarily "bad" --- after all, if their customers are paying and their loan losses are low in actuality, the stock could be worth significantly more.
For my next step of research, I thought I'd try to deduce why the stock was down so much today. I couldn't find much of an indication in Yahoo's headlines. However, I did notice that the company announced a share repurchase plan on May 21. Naturally, this intrigues me. It seems odd for a financial institution to announce a repurchase plan in the current environment. Do the execs really think this company is undervalued?
Well, just for fun, I decide to check out insider transactions. I thought to myself, "maybe there will be some buys that indicate the bank execs are bullish on the stock." That was not the case for you see, five different directors all took the opportunity to sell some of their own shares on the very day they announced the repurchase plan. It also looks like there had been some more insider dumping over the past few months.
Uhmmm, yeah. Not sure what to make of this, but I've got to say between the share buyback program and the insider selling, that would raise a little red flag for me.