On April 19th, 2023, financial news outlets reported that Allspring Global Investments Holdings LLC had cut its stake in shares of Kearny Financial Corp. (NASDAQ:KRNY) by a staggering 51.9% during the fourth quarter. The company’s most recent Form 13F filing with the SEC revealed that it sold 33,913 of its KRNY shares, leaving Allspring Global Investments Holdings LLC with only 31,467 KRNY shares to its name. This reduction brought the value of its holdings in Kearny Financial down to $319,000 by the end of the most recent reporting period.
While this news may come as a surprise to some investors, several brokerages had recently issued reports on KRNY indicating a less-than-optimistic outlook for the savings and loans company’s stock. In fact, StockNews.com began coverage on shares of Kearny Financial with a “sell” rating on March 16th of this year – just one month before Allspring Global Investments Holdings LLC decided to sell off a significant percentage of their KRNY shares. Similarly, Keefe, Bruyette & Woods cut their price objective on shares of Kearny Financial from $10.00 to $9.00 and set a “market perform” rating on the stock in an April 6th report.
As of Wednesday morning on April 19th, 2023 – the same day as these reports were published – KRNY shares opened at $7.75. Though this is obviously far below its twelve month high of $13.02 per share, it’s important to note that Kearny Financial has been struggling for some time now; in fact, its twelve month low is only two cents lower than its current opening price.
Digging into their financials reveals some potential explanations for this decline in investor confidence over time. KRNY currently has a market cap of just over half a billion dollars and a price-to-earnings ratio of 11.07 – certainly nothing to scoff at, but not necessarily an indicator of stellar performance either. Additionally, the firm has a debt-to-equity ratio of 1.59, which may make it less appealing to investors looking for less leverage.
Regardless of the reasons behind Allspring Global Investments Holding LLC’s recent sell-off of KRNY shares, it seems that Kearny Financial Corp. may have some work to do in order to win back its investors’ confidence in the coming months and years.
Institutional Investors Increase Holdings in Kearny Financial Despite Bearish Analyst Reports
Institutional investors have been modifying their holdings of Kearny Financial, with several major players increasing their stakes in the savings and loans company. Vanguard Group Inc. recently upped its holdings by 0.8% to a total of 6,370,897 shares valued at $67,659,000, while BlackRock Inc.’s share rose by 0.9% to hit a stake of 4,977,063 shares valued at $52,858,000. Dimensional Fund Advisors LP and Charles Schwab Investment Management Inc. both made gains during the first quarter of this year; Dimensional increased its holdings by 1.7% to reach 6,044,277 shares worth $77,851,000 and Charles Schwab increased theirs by 8.9%, reaching a total of 562,844 shares valued at $7,250,000. Meanwhile Ancora Advisors LLC saw an increase in its stake by an eyewatering 900%, taking them to a total of 656,009 shares worth $7,925million – making it one of Kearny Financial’s largest investors.
The company has also seen directors making purchases of stocks for personal investment. Director John J Mazur Jr purchased an additional 6k shares in March for just under $53k and director John F Regan bought another large stake for over $40k earlier that month as well. These purchases brought the insiders’ combined ownership to almost 8%.
Despite the recent insider transactions and institutional investoractivity however,some analysts are bearish on Kearny Financial’s performance prospects.StockNews.com gave the company’s stock apoor rating when it initiated coverage last month; meanwhileKeefe Bruyette & Woods lowered their price targetfrom $10to $9.
Kearny Financial announced earnings on January26thof this yearand reported an earnings per share (EPS) of $0.17,which missed the consensus estimate of $0.19 by $0.02.The company had revenue of $36.31m compared to analyst estimates of $49.20m, however it still posted a net margin of 18.76% and a return on equity of 6.43%. Kearny Financial also recently announced a quarterly dividend which was paid in February; stockholders received a dividend of$0.11 per share.
While some investors are bullish about Kearny Financial’s potential, with major institutional investors increasing their holdings and insiders buying stocks for personal investment,it is still important to consider the bearish reports put forth by analysts when considering whether to invest in KRNY’s stock or not. With these conflicting signals regarding the bank’s performance and potential, investors should conduct thorough research before making any investment decisions related to KRNY’s shares or assets.