1 Retailer, 1 Gold Miner And A Mature Lifestyles Company With Recent Intensive Insider Buying

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 |  Includes: ACC.TO, EDVMF, RONAF
by: Markus Aarnio

Since my December 7, 2012, article titled "5 Stocks With Recent Intensive Insider Buying," the stocks that I featured have performed as follows:

Company Price 12/6 Price 4/6 Change
MEMC (WFR) $2.97 $4.42 +48.8%
Fisher Communications (FSCI) $24.96 $41.30 +16.3%
Willdan (NASDAQ:WLDN) $2.15 $2.35 +9.3%
Crescent Financial Bancshares (CRFN) $4.91 $4.13 -15.9%
Chemical Financial Corporation (NASDAQ:CHFC) $21.59 $24.11 +11.7%
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In this article, I will feature three additional 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. RONA inc. (OTC:RONAF) engages in the distribution and retail of hardware, home improvement, and gardening products in Canada.

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Insider buying by insider (last 30 days)

  • Manon Bouchard purchased 4,400 shares on March 22, and currently controls 7,534 shares or less than 0.1% of the company. Manon Bouchard was promoted as Executive Vice President, Merchandising in August 2012.
  • Réal Brunet purchased 7,000 shares on March 21, and currently controls 10,700 shares or less than 0.1% of the company. Réal Brunet serves as a director of the company.
  • Robert Chevrier purchased 10,000 shares on March 26, and currently holds 25,000 shares or less than 0.1% of the company. Robert Chevrier is Executive Chairman of the Board.
  • Linda Michaud purchased 1,485 shares on April 16 and currently controls 54,839 shares or less than 0.1% of the company. Linda Michaud is a senior officer of the company.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
April 2013 1,485 0
March 2013 21,400 0
February 2013 0 0
January 2013 0 0
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There have been 22,885 shares purchased and zero shares sold this year.

Financials

The company reported the full-year 2012 financial results on February 21, with the following highlights:

Revenue $4.9 billion
Net income $8.0 million
Cash $21.0 million
Debt $328.0 million
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Competition

The home renovation, hardware and gardening industry is highly competitive. RONA's competitors include large national and multinational chains, regional groups and independent stores.

Trends in the renovation and construction sectors have a direct impact on RONA. The company's sales are related, to a certain extent, to the number of housing starts, home resales, consumer interest in renovation and housing costs. In addition, the demand for home renovation, hardware and gardening products relies on consumer tastes and emerging trends, which means RONA has to keep in close touch with customer needs and demands. RONA enjoys a solid diversification of its activities, by geography, segment, banner and store format.

The sector in which RONA does business is highly seasonal in nature. Changes in weather patterns have a certain impact on sales, and sales in the first quarter are always lower than in the other three because there is so little home renovation activity during the winter.

These various factors can have a significant impact on the company's financial position.

My analysis

There have been four different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. The insiders own 19% of the company. The stock has a $16.5 price target from the Point and Figure chart. There are zero analyst buy ratings, seven neutral ratings and one sell rating with an average target price of $11.16. The stock is trading at a P/E ratio of 147.43 and a forward P/E ratio of 12.43. The company has a book value of $13.80 per share and the stock has a dividend yield of 1.40%. I believe the stock is a good pick below the book value.

2. Amica Mature Lifestyles (ACC.TO) owns and operates seniors retirement residences.

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Insider buying by insider (last 30 days)

  • Terence Holland purchased 17,200 shares on April 15-16, and currently holds 192,100 shares or 0.6% of the company. Terence Holland serves as a director of the company.
  • Brenda Allen purchased 224 shares on April 11, pursuant to a purchase/ownership plan. Brenda Allen currently holds 4,753 shares or less than 0.1% of the company. Brenda Allen is Vice President, Human Resources.
  • James MacCallum purchased 208 shares on April 11, pursuant to a purchase/ownership plan. James MacCallum currently holds 1,325 shares or less than 0.1% of the company. James MacCallum joined Amica as Vice President, Finance in January 2012.
  • Karen Hamilton purchased 84 shares on April 11, pursuant to a purchase/ownership plan. Karen Hamilton currently holds 84 shares or less than 0.1% of the company. Karen Hamilton is Vice President, Marketing and Communications.
  • Samir Manji purchased 38,450 shares on March 18 - April 16, and currently controls 2,983,245 shares or 9.7% of the company. Samir Manji is Chairman, President & CEO of the company.
  • Claudia Salgado purchased 303 shares on April 11, pursuant to a purchase/ownership plan. Claudia Salgado currently controls 11,762 shares or less than 0.1% of the company. Claudia Salgado is Vice President, Design and Construction.
  • Charles van der Lee purchased 650 shares on March 18, and currently holds 57,570 shares or 0.2% of the company. Charles van der Lee serves as a director of the company.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
April 2013 43,019 0
March 2013 19,826 0
February 2013 8,960 0
January 2013 18,977 0
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The month of April has seen the most insider buying.

Financials

The company reported the fiscal 2013 third quarter, which ended February 28, financial results on April 9, with the following highlights:

Revenue $24.9 million
Net loss $2.0 million
Cash $14.1 million
Debt $284.5 million
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Competition

Many other developers, managers and owners of seniors housing facilities compete with Amica in seeking residents. Competition for residents is based primarily on convenience of location, quality of the residence, reputation of the operator/brand, rental rates and the range and quality of food, and the services and amenities offered. Competition for residents and prospective residents for Amica's residences could adversely affect occupancies and Amica's ability to attract residents and the rents which may be charged could affect Amica's revenues and, consequently, its ability to meet its debt obligations.

Amica competes with various healthcare service providers and the hospitality operators in attracting and retaining skilled and qualified personnel to manage and operate the company's communities. A shortage of trained and qualified personnel may require Amica to enhance wage and benefits packages in order to compete. No assurance can be given that labour costs will not increase, or that if they do increase, they can be matched by corresponding increases in rental and management revenue.

Many other entities have resources in excess of those of Amica and its partners for investment in real estate. An increased availability of investment funds in real estate would tend to increase competition for real property investments and may increase purchase prices, reducing the yields on such investments or making it more difficult for Amica and its partners to locate and purchase suitable properties.

My analysis

There have been seven different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. The stock has a $9.75 price target from the Point and Figure chart. There are five analyst buy ratings, one neutral rating and zero sell ratings with an average target price of $10.50. The stock is trading at a forward P/E ratio of 13.21. The company has a book value of $5.20 per share and the stock has a dividend yield of 4.80%. I have a cautiously bullish bias for the stock currently based on the intensive insider buying.

3. Endeavour Mining Corporation (OTCQX:EDVMF) engages in the mining, extraction, production and sale of gold in West Africa.

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Insider buying by insider (last 30 days)

  • Michael Beckett purchased 30,000 shares on April 3-16, and currently holds 160,000 shares or less than 0.1% of the company. Michael Beckett is Chairman of the Board.
  • Morgan Carroll purchased 20,000 shares on April 15, and currently holds 73,174 shares or less than 0.1% of the company. Morgan Carroll is Senior Vice President, Corporate Finance & General Counsel.
  • David Laing purchased 100,000 shares on April 10-16, and currently holds 385,793 shares or less than 0.1% of the company. David Laing is Executive Vice President, Technical Services.
  • Christian Milau purchased 15,000 shares on April 3, and currently holds 215,548 shares or less than 0.1% of the company. Christian Milau is Endeavour's Executive Vice President and Chief Financial Officer.

Insider buying by calendar month

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

Month

Insider buying / shares

Insider selling / shares

April 2013

165,000

0

March 2013

0

0

February 2013

0

0

January 2013

0

0

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The month of April has seen all of the insider buying.

Financials

The company reported the full-year 2012 financial results on March 27, with the following highlights:

Revenue

$346.1 million

Net loss

$15.5 million

Cash and gold in hand

$151.1 million

Debt

$203.6 million

Gold production

220,462 ounces

All-in sustaining cash cost

$1,077 per ounce

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Outlook

  • Total 2013 gold production guidance is between 310,000 to 345,000 ounces at an average cash cost of $840 to $880 per ounce.
  • The 2013 estimate for all-in sustaining cash cost per ounce produced is $1,055 to $1,155.
  • During 2013, Endeavour plans to invest approximately $200 million in new mine construction, development and exploration, leading to a forecast negative free cash flow of approximately $34 million after all operating and development activities.

Competition

The mining industry is intensely competitive. Significant competition exists for the acquisition of properties producing or capable of producing gold or other metals. Endeavour may be at a competitive disadvantage in acquiring additional mining properties because it must compete with other individuals and companies, many of which have greater financial resources, operational experience and technical capabilities than Endeavour. Endeavour may also encounter increasing competition from other mining companies in its efforts to hire experienced mining professionals. Increased competition could adversely affect Endeavour's ability to attract necessary capital funding or acquire suitable producing properties or prospects for mineral exploration in the future.

My analysis

There have been four different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. The insiders/management own 4% of the company. There are five analyst buy ratings, zero neutral ratings and zero sell ratings with an average target price of $3.04. Endeavour's attributable proven and probable mineral reserves are 2.5 million ounces and attributable measured and indicated resources (inclusive of reserves) are 6.4 million ounces, plus 2.6 million ounces inferred. I have a long position in the stock currently.

Disclosure: I am long OTCQX:EDVMF. 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.