NEWT

NewtekOne($NEWT) Chairman Signals Confidence With 10,000 Share Purchase Amid Post-Earnings Price Decline

05/14/2025 12:34

A notable insider transaction has emerged at $NEWT (NewtekOne Inc) amid recent share price declines. Chairman and CEO Barry Sloane purchased 10,000 shares at an average price of $11.62 on May 13, representing an investment of approximately $116,220. This purchase is particularly significant as it occurred following a sharp price drop after the company's Q1 earnings release on May 7. $NEWT is a small-cap company (market cap of approximately $277 million) operating as a bank holding company providing financial solutions primarily to small and medium-sized businesses. Looking at its performance, the company reported Q1 revenue of $113.12 million, a substantial 94.1% increase year-over-year, though earnings per share (EPS) slightly declined to $0.35 from $0.38 in the same period last year. While this met analyst expectations, it appears to have fallen short of investor hopes. What's noteworthy is that this purchase isn't an isolated action by Chairman Sloane. He has consistently bought company shares over the past year. In June 2024, he acquired a total of 10,000 shares across two transactions, followed by 6,649 shares in August, and a substantial 40,134 shares in September. He continued with 3,000-share purchases in both November and December, and maintained regular acquisitions in early 2025 according to his 10b5-1 trading plan. Moreover, Sloane isn't alone in his buying activity. Director Richard Salute purchased 5,000 shares ($55,284) on May 12, while Director Gregory Zink acquired 2,000 shares ($20,780) on May 9. This pattern of 'cluster buying' suggests a collectively positive outlook among corporate insiders regarding the current stock valuation. The backdrop for these insider purchases lies in the company's financial position and business outlook. According to the financial analysis report released on May 2, 2025, NewtekOne projects annual EPS in the range of $2.10 to $2.50, suggesting growth of approximately 17%. The company also aims to fund $1 billion in SBA 7(a) loans and grow its combined commercial and real estate loan portfolios by $225 million. Currently, $NEWT trades at a P/E ratio of 5.90, which could be considered relatively undervalued, with a Tangible Book Value per Share of $10.17 – at a discount to the current share price. The company also pays a quarterly cash dividend of $0.19, offering a substantial yield at current price levels. Meanwhile, these insider buying activities are occurring amid challenging market conditions. The U.S. stock market in early 2025 has faced significant headwinds due to rising inflation expectations and the impact of tariffs imposed by President Donald Trump. While positive inflation data on May 13 led to gains in major U.S. stock indexes, uncertainties persist, including concerns about U.S. Treasuries as safe havens. In this context, the consistent share purchases by management are particularly notable. The substantial buys by the Chairman and directors following the sharp price decline after the quarterly earnings release (post-May 7) carry additional significance. Insiders typically purchase company shares when they have confidence in the long-term outlook of the business. According to banking and financial services experts, the regional banking sector has upside potential due to interest rate cut expectations and economic recovery prospects, though volatility remains high due to inflation concerns and recession fears. Within this environment, NewtekOne is evaluated as having differentiated positioning as a niche player specialized in small business financial services. Investors should now monitor the insider buying patterns alongside $NEWT's potential performance improvements, dividend sustainability, and profitability impacts from changing interest rate environments. The recent cluster buying may signal that insiders view the current price as an attractive entry point, which could be a positive indicator for long-term investors.

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