Seeking Alpha
Long/short equity, insider ownership
Profile| Send Message|
( followers)  

The financial sector has been the top performing group in one year performance, with a 30.8% gain during the one year period.


(Click to enlarge)

One way to participate in this sector strength is the iShares Dow Jones US Financial Sector (NYSEARCA:IYF) which tracks the index.


(Click to enlarge)

I believe even better way to participate in this strength is to follow what the insiders are doing. In this article, I will feature three financial sector stocks which had intensive insider buying during the last 30 days.

Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.
  2. The stock is sold by no insiders in the month of intensive purchasing.
  3. At least two purchasers increased their holdings by more than 10 percent.

1. Blackstone / GSO Strategic Credit Fund (NYSE:BGB) is a non-diversified, closed-end management investment company that is managed by the adviser, a subsidiary of The Blackstone Group L.P. and subsidiary of GSO. The fund's primary investment objective is to seek high current income, with a secondary objective to seek preservation of capital, consistent with its primary goal of high current income.


(Click to enlarge)

Insider buys

  • Daniel Smith purchased 5,000 shares on December 28 and currently holds 8,521 shares or less than 0.1% of the company. Daniel Smith is CEO, President / Trustee and Chairman of the company.
  • Lee Shaiman purchased 2,000 shares on December 28 and currently holds 3,000 shares or less than 0.1% of the company. Lee Shaiman is Executive Vice President, Assistant Secretary.
  • Gary Schpero purchased 265 shares on December 28 and currently holds 265 shares or less than 0.1% of the company. Gary Schpero serves as a director of the company.
  • Jane Lee purchased 4,359 shares on December 17 and currently holds 4,359 shares or less than 0.1% of the company. Jane Lee serves as a Public Relations Officer of the company.

Financials

The company's Net Asset Value was $19.23 per share as of January 2, 2013.

My analysis

The stock started trading in October 2012. There have been nine insider buy transactions and there have not been any insider sell transactions since the IPO. The stock is currently trading at a 1.66% discount to its Net Asset Value. The stock could be a good pick below the Net Asset Value.

2. Bay Banks of Virginia (OTCQB:BAYK) operates as the holding company for Bank of Lancaster that provides banking and related financial services to individual and commercial customers in Virginia.

Insider buys

  • Deborah Evans purchased 9,400 shares on December 31 pursuant to a private placement. Deborah Evans currently holds 11,336 shares or 0.2% of the company. Deborah Evans is Chief Financial Officer of the company.
  • Kenneth Bransford purchased 12,000 shares on December 31 pursuant to a private placement. Kenneth Bransford currently holds 26,080 shares or 0.5% of the company. Kenneth Bransford serves as a director of the company.
  • Robert Berry purchased 2,000 shares on December 31 pursuant to a private placement. Robert Berry currently holds 5,659 shares or 0.1% of the company. Robert Berry serves as a director of the company.
  • Richard Farmar purchased 23,532 shares on December 31 pursuant to a private placement. Richard Farmar currently holds 46,358 shares or 1.0% of the company. Richard Farmar serves as a director of the company.
  • Julien Patterson purchased 258,824 shares on December 31 pursuant to a private placement. Julien Patterson currently holds 288,682 shares or 6.0% of the company. Julien Patterson serves as a director of the company.
  • Robert Hurliman purchased 10,000 shares on December 31 pursuant to a private placement. Robert Hurliman currently holds 26,983 shares or 0.6% of the company. Robert Hurliman is Chairman of the Board.
  • Randal Greene purchased 29,412 shares on December 31 pursuant to a private placement. Randal Greene currently holds 34,412 shares or 0.7% of the company. Randal Greene is President & CEO of the company.

Financials

The company reported the third-quarter financial results on November 5 with the following highlights:

Net income $0.2 million
Book value $10.73 per share
Tangible book value $9.66 per share

Bay Banks of Virginia announced on December 31, 2012 the successful completion of a private stock offering. The company raised $9.35 million in new capital through a private placement of 2.2 million shares of its common stock at a price of $4.25 per share.

Peer analysis

Bay Banks of Virginia's peer group consists of the following: Alliance Bankshares Corporation (NASDAQ:ABVA), Bank of Virginia (BOVA), Benchmark Bankshares (OTCQB:BMBN), Botetourt Bankshares (OTCQB:BORT), Cardinal Bankshares Corporation (OTCQB:CDBK), Central Virginia Bankshares (OTC:CVBK), Chesapeake Financial Shares (OTCQB:CPKF), Colonial Virginia Bank (OTCQB:CNVB), First Capital Bancorp (NASDAQ:FCVA), Grayson Bankshares (OTCQB:GSON), Heritage Bankshares (OTCQB:HBKS), Pinnacle Bankshares Corporation (OTCQB:PPBN), Village Bank and Trust Financial Corp. (NASDAQ:VBFC), Virginia Heritage Bank (OTCQB:VGBK), Virginia National Bank (OTCQX:VABK). Here is a table comparing these companies.

Company BAYK Peer average
P/E 23.00 15.55
Price/Book (%) 42.85 66.97
Dividend Yield (%) 4.82 0.65

Bay Banks of Virginia is trading below the peer average P/B ratio and has a higher dividend yield than the peer average.

My analysis

There have been 10 insider buy transactions and there have not been any insider sell transactions this year. The stock is currently trading below the tangible book value of $9.66 per share. I have a bullish bias for the stock below the tangible book value.

3. New Peoples Bankshares (OTCQB:NWPP) operates as the bank holding company for New Peoples Bank that offers banking and related financial services to individuals, small to medium size businesses, and the professional community.

Insider buys

  • Frank Kilgore purchased 33,334 shares on December 28 pursuant to a public offering. Frank Kilgore currently holds 124,754 shares or 0.6% of the company. Frank Kilgore serves as a director of the company.
  • Harold Keene purchased 1,538,009 shares on December 28 pursuant to a public offering. Harold Keene currently holds 3,437,089 shares or 15.6% of the company. Harold Keene serves as a director of the company.
  • Fred Meade purchased 4,761 shares on December 28 pursuant to a public offering. Fred Meade currently holds 43,657 shares or 0.2% of the company. Fred Meade serves as a director of the company.
  • Michael McGlothlin purchased 283,334 shares on December 28 pursuant to a public offering. Michael McGlothlin currently holds 401,601 shares or 1.8% of the company. Michael McGlothlin serves as a director of the company.
  • Joe Carter purchased 4,163 shares on December 28 pursuant to a public offering. Joe Carter currently holds 20,922 shares or 0.1% of the company. Joe Carter serves as a director of the company.
  • Frank Sexton purchased 17,979 shares on December 28 pursuant to a public offering. Frank Sexton currently holds 50,440 shares or 0.2% of the company. Frank Sexton is Executive Vice President & COO of the company.
  • Scott White purchased 1,577,016 shares on December 28 pursuant to a public offering. Scott White currently holds 3,757,834 shares or 17.2% of the company. Scott White serves as a director of the company.
  • Eugene Hearl purchased 1,831 shares on December 28 pursuant to a public offering. Eugene Hearl currently holds 2,931 shares or less than 0.1% of the company. Eugene Hearl serves as a director of the company.
  • Charles Gent purchased 4,000 shares on December 28 pursuant to a public offering. Charles Gent currently holds 25,450 shares or 0.1% of the company. Charles Gent serves as a director of the company.
  • John Cox purchased 268,523 shares on December 28 pursuant to a public offering. John Cox currently holds 270,402 shares or 1.2% of the company. John Cox serves as a director of the company.
  • Jonathan Mullins purchased 2,100 shares on December 28 pursuant to a public offering. Jonathan Mullins currently holds 3,200 shares or less than 0.1% of the company. President & CEO is President & CEO of the company.
  • Todd Asbury purchased 1,000 shares on December 28 pursuant to a public offering. Todd Asbury currently holds 1,000 shares or less than 0.1% of the company. Todd Asbury is Executive Vice President & CFO of the company.

Financials

The company reported the third-quarter financial results on November 13 with the following highlights:

Net loss $1.5 million
Book value (March 31, 2012) $2.61 per share
Tangible book value (March 31,2012) $2.60 per share

New Peoples Bankshares announced the successful conclusion of the public offering of its common stock on December 20, 2012. New Peoples raised over $12,000,000 of new capital in the offering, which began in July 2012. In addition, the conversion into common stock of $5,450,000 of New Peoples convertible debt in September, 2012 means that New Peoples has successfully raised almost $18,000,000 of new equity in the last 3 months.

My analysis

There have been 13 insider buy transactions and there have not been any insider sell transactions this year. The stock is currently trading below the tangible book value of $2.60 per share. I have a bullish bias for the stock below the tangible book value.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in OTCQB:NWPP over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: 3 Financial Sector Stocks With Recent Intensive Insider Buying