Axos Financial Stock Soars 34% in a Year, Even as Major Fund Trims $3 Million Stake

NEW YORK – Shares of digital banking leader Axos Financial (NYSE: AX) have surged 34% over the past 12 months, a rally that appears intact even after a significant institutional investor decided to cash in some chips. Regulatory filings reveal that investment firm PMC FIG Opportunities sold 33,048 shares in the fourth quarter, a transaction valued at approximately $2.72 million based on average pricing.

The sale reduced the fund's stake in Axos from over 5% of its portfolio assets to below 1%, a move industry watchers are interpreting more as prudent portfolio rebalancing than a vote of no confidence. "When a stock has the kind of run Axos has had, it's common for funds to trim winners to manage overall portfolio risk," noted Sarah Chen, a financial sector analyst at Veritas Insights. "This doesn't necessarily reflect a bearish outlook on the company's fundamentals, which remain strong."

Those fundamentals were on full display in Axos's latest quarterly report. The bank posted net income of $128.4 million for the December quarter, a significant jump from $104.7 million a year earlier. Diluted earnings per share climbed to $2.22. Driving the performance was an 18.4% year-over-year increase in net interest income to $331.7 million, supported by robust loan growth that pushed total balances to $24.3 billion. The bank's net interest margin expanded to 4.94%, while credit quality remained exemplary, with net charge-offs at a minuscule 0.04% of average loans.

Axos operates as a digital-first regional bank, leveraging technology to offer a wide array of banking and lending services to consumers and businesses nationwide. Its scalable platform and focus on operational efficiency have positioned it as a formidable competitor in a financial sector increasingly defined by digital transformation.

Investor Perspectives: A Mixed Bag

The news has sparked varied reactions from the investment community:

Michael R. Thornton, Portfolio Manager at Clearwater Capital: "This is classic profit-taking, not a fundamental critique. Axos is executing superbly—growing loans, deposits, and earnings while maintaining pristine credit. The valuation is getting rich, sure, but the viability of their model is unquestionable. I'm holding."

David K. Lee, Independent Retail Investor: "A fund selling millions worth of stock is always a red flag for me, no matter the reason they give. It makes you wonder what they see that we don't. The run-up has been fantastic, but I'm taking some profits off the table here. Better safe than sorry."

Janet Alvarez, Financial Blogger at 'The Pragmatic Saver': "This is infuriating short-termism! Axos is a textbook example of a well-run, modern bank that's actually growing. A fund ditching shares after a mere 34% gain? This is why Wall Street is broken. They'd sell their grandmother for a quarterly bonus. Long-term investors should see this as noise and focus on the stellar earnings report."

Robert Garcia, CFA, at Midwest Investment Advisors: "The key takeaway isn't the sale, but the context. The stock is up sharply, and earnings support the move. The fund's reduction is a risk-management tactic, not a fundamental call. For new money, I'd wait for a better entry point, but existing holders have little reason to panic."

Disclosure: The Motley Fool holds positions in and recommends Axos Financial. Bank of America is an advertising partner of The Motley Fool.