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The financial sector has been the top-performing group over the recent six-month period with a gain of 18.3%.

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In this article I will feature three financial sector stocks that have seen recent intensive insider buying. 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. ARMOUR Residential REIT (NYSE:ARR) is a real estate investment trust launched and managed by ARMOUR Residential Management LLC.

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Insider buying by insider (last 30 days)

  • John Hollihan purchased 16,300 shares on March 15 and currently holds 34,721 shares or less than 0.1% of the company. John Hollihan serves as a director of the company.
  • Scott Ulm purchased 5,000 shares on March 15 and currently holds 115,001 shares or less than 0.1% of the company. Scott Ulm has been the Co-Chief Executive Officer, Vice Chairman, Chief Investment Officer and Head of Risk Management of ARMOUR since November 2009.
  • Jeffrey Zimmer purchased 10,000 shares on March 15 and currently holds 45,927 shares of the company. Jeffrey Zimmer has been the Co-Chief Executive Officer, Vice Chairman and President of ARMOUR since November 2009.

Insider buying by calendar month

Here is a table of ARMOUR's insider trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
March 201331,3000
February 201300
January 201300
December 201200
November 201240,0000
October 201200
September 201220,0000
August 201200
July 201200
June 201200
May 201200
April 201200
March 201285,0000

There have been 176,300 shares purchased and zero shares sold since March 2012.

Financials

The company reported the full year 2012 financial results on February 22 with the following highlights:

Net income$220.3 million
Book value$7.29 per share
Monthly Q2/2013 dividend$0.07 per share

Competition

ARMOUR's competitors include Annaly Capital Management (NYSE:NLY), Capstead Mortgage Corp. (NYSE:CMO) and MFA Financial (NYSE:MFA). Here is a table comparing these companies.

CompanyARRNLYCMOMFAIndustry Average (REIT - Residential)
Market Cap:1.97B14.83B1.24B3.29B2.75B
Employees:N/A14712371.22K
Qtrly Rev Growth (yoy):3.560.54-0.170.100.03
Revenue:246.66M2.17B178.61M347.91M342.91M
Gross Margin:1.001.001.001.000.61
EBITDA:N/AN/AN/AN/A246.94M
Operating Margin:0.900.890.910.900.34
Net Income:220.34M1.70B142.23M297.16MN/A
EPS:0.981.711.500.831.48
P/E:6.509.148.6511.0223.81
PEG (5 yr expected):0.693.361.682.432.15
P/S:7.866.766.949.467.40

ARMOUR is trading below the industry average P/E ratio, which could explain some of the insider buying.

My analysis

There have been three insider buy transactions and there have not been any insider sell transactions during the past 30 days. There are five analyst buy ratings, five neutral ratings and one sell rating with an average target price of $7.18. The stock is trading at a P/E ratio of 6.50 and a forward P/E ratio of 6.37. The stock has a dividend yield of 13.2%. The company estimated that its book value as of February 13 was $6.70 to $6.76 per diluted common share. I have a long position in the stock currently.

2. Element Financial Corporation (OTC:ELEEF), an independent finance company, originates, manages, and funds equipment leases for the end-users, distributors, and manufacturers.

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Insider buying by insider (last 30 days)

  • Stephens Lowden purchased 10,000 shares on March 12 pursuant to a public offering. Stephens Lowden currently holds 45,000 shares or less than 0.1% of the company. Stephens Lowden serves as a director of the company.
  • Stephen Sands purchased 5,000 shares on March 12 pursuant to a public offering. Stephen Sands currently holds 311,381 shares or 0.3% of the company. Stephen Sands is Chief Credit Officer.
  • Michel Béland purchased 5,100 shares on March 12 pursuant to a public offering. Michel Béland currently holds 153,314 shares or 0.1% of the company. Michel Béland is Chief Financial Officer of the company.
  • Harold Bridge purchased 30,000 shares on March 12 pursuant to a public offering. Harold Bridge currently holds 57,500 shares or less than 0.1% of the company. Harold Bridge serves as a director of the company.
  • Donald Campbell purchased 64,500 shares on March 12 pursuant to a public offering. Donald Campbell currently holds 64,500 shares or less than 0.1% of the company. Donald Campbell is an insider of the company.
  • Paul Campbell purchased 12,300 shares on March 12 pursuant to a public offering. Paul Campbell currently controls 42,270 shares or less than 0.1% of the company. Paul Campbell is an insider of the company.
  • Fraser Clarke purchased 13,000 shares on March 12 pursuant to a public offering. Fraser Clarke currently holds 277,186 shares or 0.3% of the company. Fraser Clarke serves as a director of the company.
  • Steve Grosso purchased 12,900 shares on March 12 pursuant to a public offering. Steve Grosso currently holds 12,900 shares or less than 0.1% of the company. Steve Grosso is an insider of the company.
  • Michael Harris purchased 10,000 shares on March 12 pursuant to a public offering. Michael Harris currently holds 123,665 shares or 0.1% of the company. Michael Harris serves as a director of the company.
  • Steven Hudson purchased 5,100 shares on March 12 pursuant to a public offering. Steven Hudson currently holds 1,629,385 shares or 1.6% of the company. Steven Hudson is the Chairman and Chief Executive Officer of Element.
  • Todd Hudson purchased 6,450 shares on March 12 pursuant to a public offering. Todd Hudson currently holds 242,521 shares or 0.2% of the company. Todd Hudson is Executive Vice President, Originations.
  • Pierre Lortie purchased 7,000 shares on March 12 pursuant to a public offering. Pierre Lortie currently holds 68,309 shares or less than 0.1% of the company. Pierre Lortie serves as a director of the company.
  • Leslie Martin purchased 129,025 shares on March 12 pursuant to a public offering. Leslie Martin currently holds 329,025 shares or 0.3% of the company. Leslie Martin serves as a director of the company.
  • Bradley Nullmeyer purchased 5,100 shares on March 12 pursuant to a public offering. Bradley Nullmeyer currently holds 529,275 shares or 0.5% of the company. Bradley Nullmeyer was appointed President of the company, effective September 1, 2012.
  • Stephen Rotz purchased 3,500 shares on March 12 pursuant to a public offering. Stephen Rotz currently holds 3,500 shares or less than 0.1% of the company. Stephen Rotz is a senior officer of the company.
  • Steven Small purchased 15,000 shares on March 12 pursuant to a public offering. Steven Small currently holds 684,309 shares or 0.7% of the company. Steven Small serves as a director of the company.
  • Bruce Smith purchased 5,100 shares on March 12 pursuant to a public offering. Bruce Smith currently holds 217,505 shares or 0.2% of the company. Bruce Smith is President, Chief Operating Officer and a director of the company.
  • Paul Stoyan purchased 20,000 shares on March 12 pursuant to a public offering. Paul Stoyan currently holds 218,691 shares or 0.2% of the company. Paul Stoyan serves as a director of the company.

Insider buying by calendar month

Here is a table of Element Financial Corporation's insider trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
March 2013359,0750
February 201300
January 201300
December 201200
November 201200

The month of March 2013 has seen all of the insider buying.

Financials

The company reported the full year 2012 financial results on February 19 with the following highlights:

Revenue$58.0 million
Net loss$6.4 million
Cash$10.0 million
Debt$989.1 million

On March 12 the company closed a $173 million bought deal equity financing.

My analysis

There have been 19 insider buy transactions and there have not been any insider sell transactions during the past 30 days. The company has a book value of $4.21 per share. The 200 day moving average is currently at $6.50, which could be a good entry point for the stock.

3. Artisan Partners Asset Management (NYSE:APAM) provides investment management services in the United States and internationally. It offers 12 equity investment strategies spanning various market capitalization segments and investing styles.

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Insider buying by insider (last 30 days)

  • Jeffrey Joerres purchased 3,500 shares on March 12 pursuant to the initial public offering. Jeffrey Joerres currently holds 6,834 shares or less than 0.1% of the company. Jeffrey Joerres serves as a director of the company.
  • Stephanie Dimarco purchased 20,000 shares on March 12 pursuant to the initial public offering. Stephanie Dimarco currently holds 23,334 shares or less than 0.1% of the company. Stephanie Dimarco serves as a director of the company.
  • Charles Daley purchased 800 shares on March 12 pursuant to the initial public offering. Charles Daley currently holds 188,111 shares or 0.3% of the company. Charles Daley is Executive Vice President, CFO & Treasurer.

Insider buying by calendar month

Here is a table of Artisan Partners' insider trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
March 201324,3000
February 201300
January 201300
December 201200
November 201200
October 201200
September 201200
August 201200
July 201200
June 201200
May 201200
April 201200
March 201200
February 201200

Artisan Partners had its IPO on March 7.

Financials

The company reported the pro forma full year 2012 financial results with the following highlights:

Revenue$505.6 million
Net income$6.7 million
Cash$60.0 million
Debt$200.0 million
Net tangible book value$0.31 per share

My analysis

The stock started trading on March 7 after the IPO. There have been three different insiders buying the shares and there have not been any insiders selling the shares since the IPO. The stock is trading at a P/E ratio of 363.24. The company expects that its first dividend will be paid in the third quarter of 2013 and will be approximately $0.43 per share. I have a neutral bias for the stock currently based on the significant run up in the shares since the IPO.

Source: 3 Financial Sector Stocks With Recent Intensive Insider Buying