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Since my January 3 article titled "3 Financial Sector Stocks With Recent Intensive Insider Buying", the stocks that I featured have performed as follows:

CompanyPrice 1/2Price 2/15Change %
BGB$18.91$19.44+2.8
OTCQB:BAYK$4.60$5.25+14.1
OTCQB:NWPP$1.25$1.75+40.0

In this article, I will feature three additional financial stocks that have seen 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 increase their holdings by more than 10%.

1. ZAIS Financial Corp. (NYSE:ZFC) is a externally-managed and advised real estate investment trust [REIT] that invests in, finances and manages a diversified portfolio of residential mortgage assets, other real estate-related securities and financial assets.

(click to enlarge)

Insider buying

  • Michael Szymanski purchased 5,000 shares on February 8 and currently holds 16,246 shares or 0.2% of the company. Michael Szymanski currently serves as Chief Executive Officer, President and Director.
  • Denise Crowley purchased 5,000 shares on February 8 and currently controls 11,437 shares or 0.1% of the company. Denise Crowley serves as a director of the company.
  • Christian Zugel purchased 10,000 shares on February 8 and currently holds 52,911 shares or 0.7% of the company. Christian Zugel serves as Chairman of the Board.
  • Brian Hargrave purchased 1,000 shares on February 8-12 and currently holds 5,499 shares or less than 0.1% of the company. Brian Hargrave serves as Chief Investment Officer.

Financials

The company reported the preliminary financial results for the three months ending December 31, 2012 with the following highlights:

Net income$4.1-$4.3 million
Book value$21.61 per share

Outlook

While U.S. financial markets have recovered significantly since the financial crisis that began in 2007, much of the residential mortgage market remains under a great deal of distress. The unprecedented liquidity injections into the U.S. financial system have restored stability in the financial sector and supported the flow of capital and credit into the broader economy. At the same time, the U.S. housing market recovery remains tepid, and bank holdings of delinquent mortgage loans remain high. The company believes that the slow resolution of mortgage foreclosures has constrained the volume of distressed home sales and may have provided a floor to home prices. This floor has also been supported in some local markets by bulk buyers of foreclosed homes targeting the single family rental market. Continued high levels of "shadow inventory" will likely increase the volume of distressed sales in the future and slow the pace of recovery. While yield levels in the RMBS market have recovered from the depths of the financial crisis and the company expects to see further credit spread tightening, the company believes the volatility of expected credit performance across the RMBS market presents many opportunities based on individual sector and security selection. In addition, the company expects the opportunity to acquire mortgage loans from legacy portfolios to continue for some time as economic risk factors persist.

Competition

The company's success depends, in large part, on its ability to acquire assets at favorable spreads over its borrowing costs and its ability to efficiently manage its portfolio risks. In acquiring target assets and establishing hedge positions, the company competes with other existing mortgage REITs (both internally and externally managed), government sponsored enterprises, mortgage finance and specialty finance companies, savings and loan associations, banks, mortgage bankers, insurance companies, hedge funds (including those managed by ZAIS), mutual funds, institutional investors, investment banking firms, governmental bodies and other companies with similar asset acquisition objectives, and others which may be organized in the future.

My analysis

The stock started trading on February 8 after the initial public offering. There have been four different insiders buying and there have not been any insiders selling the shares since the IPO. All directors, executive officers and director nominees as a group (10 persons) currently own 2.05% of the company. The stock could be a good pick below the book value of $21.61 per share.

2. Crescent Financial Bancshares (CRFN) operates as the bank holding company for Crescent State Bank that provides commercial and retail banking services to individuals and small-to-medium sized businesses in North Carolina.

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Insider buying

  • Adam Abram purchased 2,535 shares on February 11 and currently holds 10,700 shares or less than 0.1% of the company. Adam Abram serves as a director of the company.
  • Brent Barringer purchased 2,400 shares on February 6-12 and currently holds 50,890 shares or 0.1% of the company. Brent Barringer serves as a director of the company.
  • James Lucas purchased 2,000 shares on February 5-7 and currently holds 327,078 shares or 0.9% of the company. James Lucas serves as a director of the company.
  • Steven Jones purchased 2,000 shares on February 1 and currently holds 6,319 shares or less than 0.1% of the company. Steven Jones has been President of VantageSouth Bank since 2010.

Financials

The company reported the fourth-quarter financial results on January 30 with the following highlights:

Net income$2.1 million
Book value$4.18 per share
Tangible book value$3.37 per share

Competition

Crescent Financial Bancshares' competitors include Bank of America Corporation (NYSE:BAC), BB&T Corporation (NYSE:BBT) and PNC Financial Services Group (NYSE:PNC). Here is a table comparing these companies.

CompanyCRFNBACBBTPNCIndustry Average (Regional - Mid-Atlantic Banks)
Market Cap:155.43M130.74B21.24B33.72B48.62M
Employees:N/A267,190N/A50,947119.00
Qtrly Rev Growth (yoy):0.43-0.250.070.120.10
Revenue:47.55M75.16B8.62B14.52B26.26M
Operating Margin:0.070.060.390.270.25
Net Income:2.85M2.76B1.92B2.82BN/A
EPS:0.080.252.705.300.53
P/E:54.3748.5211.2412.0514.00
PEG (5 yr expected):N/A0.660.961.612.13
P/S:3.271.742.462.321.93

Crescent Financial Bancshares is growing faster than the industry.

My analysis

There have been six insider buy transactions and there have not been any insider sell transactions during the last 30 days. There are 0 analyst buy ratings, one neutral rating and 0 sell ratings for the stock currently. The stock is trading at a P/E ratio of 54.37 and a forward P/E ratio of 21.75. I might get interested in the stock if we get a pullback to the tangible book value of $3.37 per share.

3. ConnectOne Bancorp (NASDAQ:CNOB) is a community-based, full-service New Jersey-chartered commercial bank that was founded in 2005.

(click to enlarge)

Insider buys

  • Frank Sorrentino purchased 2,000 shares on February 12 pursuant to a initial public offering. Frank Sorrentino currently holds 124,934 shares or 2.6% of the company. Frank Sorrentino is Chairman & CEO of the company.
  • Laura Criscione purchased 515 shares on February 12 pursuant to a initial public offering. Laura Criscione currently holds 4,095 shares or less than 0.1% of the company. Laura Criscione is Executive Vice President, Chief Compliance Officer.
  • Peter Tomasi purchased 1,000 shares on February 12 pursuant to a initial public offering. Peter Tomasi currently holds 2,368 shares or less than 0.1% of the company. Peter Tomasi is Senior Vice President, Chief Credit Officer.
  • Elizabeth Magennis purchased 300 shares on February 12 pursuant to a initial public offering. Elizabeth Magennis currently holds 1,240 shares or less than 0.1% of the company. Elizabeth Magennis is Executive Vice President, Chief Lending Officer.
  • William Burns purchased 2,000 shares on February 12 pursuant to a initial public offering. William Burns currently holds 3,667 shares or less than 0.1% of the company. William Burns is Executive Vice President, Chief Financial Officer.
  • Steven Goldman purchased 2,000 shares on February 12 pursuant to a initial public offering. Steven Goldman currently holds 25,542 shares or 0.5% of the company. Steven Goldman serves as a director of the company.
  • Frank Huttle purchased 2,000 shares on February 12 pursuant to a initial public offering. Frank Huttle currently holds 57,243 shares or 1.2% of the company. Frank Huttle serves as a director of the company.
  • Dale Creamer purchased 2,000 shares on February 12 pursuant to a initial public offering. Dale Creamer currently holds 55,630 shares or 1.2% of the company. Dale Creamer serves as a director of the company.
  • Michael Kempner purchased 1,600 shares on February 12 pursuant to a initial public offering. Michael Kempner currently holds 125,113 shares or 2.6% of the company. Michael Kempner serves as a director of the company.
  • Stephen Boswell purchased 2,000 shares on February 12 pursuant to a initial public offering. Stephen Boswell currently holds 81,498 shares or 1.7% of the company. Stephen Boswell serves as a director of the company.
  • Frank Baier purchased 2,000 shares on February 12 pursuant to a initial public offering. Frank Baier currently holds 19,720 shares or 0.4% of the company. Frank Baier serves as a director of the company.
  • Frank Cavuoto purchased 1,000 shares on February 12 pursuant to a initial public offering. Frank Cavuoto currently holds 24,468 shares or 0.5% of the company. Frank Cavuoto serves as a director of the company.
  • Joseph Parisi purchased 2,000 shares on February 12 pursuant to a initial public offering. Joseph Parisi currently holds 52,875 shares or 1.1% of the company. Joseph Parisi serves as a director of the company.

Financials

The company reported the nine months, ending September 30, 2012, financial results with the following highlights:

Net income$6.1 million
Book value$22.27 per share
Tangible book value$22.19 per share

Competition

The banking business is highly competitive. The company faces substantial immediate competition and potential future competition both in attracting deposits and in originating loans. The company competes with numerous commercial banks, savings banks and savings and loan associations, many of which have assets, capital and lending limits larger than those that ConnectOne has. Other competitors include money market mutual funds, mortgage bankers, insurance companies, stock brokerage firms, regulated small loan companies, credit unions and issuers of commercial paper and other securities.

My analysis

The stock started trading on February 12 after the initial public offering. There have been 13 different insiders buying and there have not been any insiders selling the shares since the IPO. All directors, executive officers and director nominees as a group (13 persons) currently own 27.36% of the company. I have a neutral bias for the stock currently based on the significant premium to the book value.

Source: 3 Financial Stocks With Recent Intensive Insider Buying