2iQ Insider Brief: ONESAVINGS BANK (OSB: LN)

Robert Hable 23 June 2020

OneSavings Bank (OSB: LN)

12-month performance: -28%
Insider activity: Bearish
Selling pattern: Large sale from top insider
Recent news: Issued Covid-19 trading update

OneSavings Bank is a UK challenger bank. A specialist lender, OneSavings is focused on selected sub-sectors of the mortgage market including buy-to-let, commercial and semi-commercial, and shared ownership. The stock is listed on the London Stock Exchange and currently has a market capitalisation of £1.2 billion.

We last covered OneSavings Bank in December when the stock was trading at around 420p. At the time, we highlighted the fact that multiple insiders –  including the CEO, CFO, and the COO – had recently been offloading stock, which was slightly concerning, in our view. Fast forward to today, and OneSavings Bank shares now trade at 276p, meaning they have fallen around 34% since our last report. In a recent trading update, the bank said that it is too soon to say what the longer-term impact of Covid-19 will be on the business.

OSB-LN-chartSource 2iQ Research

Looking at recent insider transaction activity, we think there’s further risk to the downside here. We say this because on 12 June, we observed a large sale (320,595 shares) from Managing Director Alan Cleary. Cleary was recently appointed MD of the group after OneSavings Bank merged with Charter Court, so he is likely to have a good understanding of the business and its near-term prospects. Interestingly, Cleary was buying shares in March when the stock was trading near 200p. However, after the recent stock market rally – in which OSB has rebounded 50% – he has turned into a seller. We see this insider sale as a bearish signal.

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