2 Banks And 1 Energy Company With Recent Intensive Insider Buying

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 |  Includes: CFNL, KEG, SCNB
by: Markus Aarnio

Since my article April 22, titled "2 Financials And 1 Retailer With Recent Intensive Insider Buying," the stocks that I featured have performed as follows:

Company

Price 4/19

Price 5/2

Change

First Security Group (NASDAQ:FSGI)

$2.72

$3.77

+38.6%

STAG Industrial (NYSE:STAG) $22.44 $21.86 -2.6%
U.S. Auto Parts Network (NASDAQ:PRTS) $1.18 $1.23 +4.2%
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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. Cardinal Financial Corporation (NASDAQ:CFNL), a financial holding company, provides various banking products and services to commercial and retail customers in Northern Virginia, Maryland, and the greater Washington, D.C. metropolitan area.

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Insider buying by insider (last 30 days)

  • William Buck purchased 3,000 shares on April 24 - May 1, and currently holds 189,000 shares or 0.6% of the company. William Buck serves as a director of the company.
  • Sidney Dewberry purchased 6,000 shares on April 25, and currently holds 123,600 shares or 0.4% of the company. Sidney Dewberry serves as a director of the company.
  • Mark Wendel purchased 1,452 shares on April 25, and currently holds 4,890 shares or less than 0.1% of the company. Mark Wendel is Executive Vice President, Chief Financial Officer.
  • Bernard Clineburg purchased 1,025 shares on April 24, and currently holds 289,494 shares or 1.0% of the company. Bernard Clineburg is Chairman and Chief Executive Officer.
  • Alice Frazier purchased 2,000 shares on April 23, and currently holds 3,500 shares or less than 0.1% of the company. Alice Frazier is Executive Vice President, Chief Operating Officer.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
May 2013 500 0
April 2013 12,977 0
March 2013 0 0
February 2013 0 10,000
January 2013 1,500 0
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The month of April has seen the most insider buying.

Financials

The company reported the first-quarter financial results on April 18, with the following highlights:

Net income $7.2 million
Book value $10.36 per share
Tangible book value $10.03 per share
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Competition

Cardinal's competitors include BB&T Corporation (NYSE:BBT), The PNC Financial Services Group (NYSE:PNC) and Virginia Commerce Bancorp (NASDAQ:VCBI). Here is a table comparing these companies.

Company CFNL BBT PNC VCBI
Market Cap: 461.65M 21.46B 35.54B 428.75M
Employees: 706 33,952 50,942 330
Qtrly Rev Growth (yoy): 0.07 0.07 0.04 0.03
Revenue: 142.68M 8.75B 14.69B 110.08M
Operating Margin: 0.44 0.39 0.27 0.48
Net Income: 44.82M 1.70B 2.99B 23.75M
EPS: 1.48 2.38 5.63 0.70
P/E: 10.22 12.86 11.94 18.84
PEG (5 yr expected): 0.70 1.27 1.31 1.99
P/S: 3.24 2.45 2.42 3.89
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Cardinal's P/E ratio is below its direct competitors.

My analysis

There have been five different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. There are three analyst buy ratings, five neutral ratings and zero sell ratings, with an average target price of $17.57. The stock is trading at a P/E ratio of 10.22 and a forward P/E ratio of 11.59. The company has a book value of $10.36 per share and the stock has a dividend yield of 1.59%. The stock is currently trading right at its 200-day moving average, which could be a good entry point for the stock.

2. Key Energy Services (NYSE:KEG) operates as an onshore rig-based well servicing contractor in the United States and internationally.

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Insider buying by insider (last 30 days)

  • William Fertig purchased 20,000 shares on May 2, and currently holds 154,926 shares or 0.1% of the company. William Fertig has been a member of the Board since April 2000.
  • William Owens purchased 10,000 shares on May 2, and currently holds 62,311 shares or less than 0.1% of the company. William Owens has been a member of the Board since January 2007.
  • Ralph Michael purchased 10,000 shares on April 30, and currently holds 115,809 shares or less than 0.1% of the company. Ralph Michael has been a member of the Board since March 2003.
  • Richard Alario purchased 50,000 shares on April 30, and currently holds 1,294,698 shares or 0.9% of the company. Richard Alario is Chairman, President and Chief Executive Officer of Key Energy Services.

Insider buying by calendar month

Here is a table of Key Energy Services' insider trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
May 2013 30,000 0
April 2013 60,000 0
March 2013 0 11,500
February 2013 0 0
January 2013 0 0
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The month of April has seen the most insider buying.

Financials

The company reported the first-quarter financial results on April 25, with the following highlights:

Revenue $428.4 million
Net loss $0.3 million
Cash $39.9 million
Debt $878.0 million
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Outlook

Key's Chairman, President and Chief Executive Officer, Dick Alario, commented on April 25:

"Thus far in the second quarter, Key's U.S. activity is following seasonal trends, which typically generate 3% to 5% activity improvement from first quarter levels, and we now anticipate a gradual activity increase for the year. Additionally, we are implementing a significant restructuring of our Fluid Management Services business to better align it with current market conditions.

In Mexico, we are currently operating just under half of the rigs that we were operating during the first quarter of the year. We are closely monitoring our customer's evolving plans, and we are quickly reducing our costs in the country commensurate with the activity decline. While we understand this disruption to be short term, we are redeploying rigs to unaffected areas in Mexico and other countries where there are opportunities for these rigs."

Competition

Key's competitors include Basic Energy Services (NYSE:BAS) and Nabors Industries (NYSE:NBR). Here is a table comparing these companies.

Company KEG BAS NBR Industry Average (Oil & Gas Drilling & Exploration)
Market Cap: 922.43M 522.12M 4.34B 2.15B
Employees: 9,600 5,700 24,500 547.00
Qtrly Rev Growth (yoy): -0.12 -0.18 -0.17 0.00
Revenue: 1.90B 1.31B 6.68B 941.90M
Gross Margin: 0.32 0.33 0.35 0.52
EBITDA: 374.94M 255.09M 1.82B 333.35M
Operating Margin: 0.08 0.05 0.11 0.11
Net Income: 66.82M -7.55M 191.81M N/A
EPS: 0.02 -0.19 0.44 0.49
P/E: 263.91 N/A 33.72 12.35
PEG (5 yr expected): 1.39 3.24 1.43 0.22
P/S: 0.49 0.40 0.65 0.93
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Key is trading below the industry average P/S ratio, which could explain some of the insider buying.

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. There are seven analyst buy ratings, 15 neutral ratings and zero sell ratings, with an average target price of $10.28. The stock is trading at a P/E ratio of 263.91 and a forward P/E ratio of 7.59. The company has a book value of $8.29 per share. I believe the stock could be a good pick below the book value.

3. Suffolk Bancorp (SUBK) operates as the holding company for Suffolk County National Bank, which provides domestic, retail, and commercial banking services, as well as wealth management services in Suffolk County, New York.

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Insider buying by insider (last 30 days)

  • Michael Orsino purchased 1,000 shares on May 1, and currently holds 3,973 shares or less than 0.1% of the company. Michael Orsino is Executive Vice President & Chief Lending Officer.
  • Howard Bluver purchased 5,000 shares on April 29, and currently holds 25,000 shares or 0.2% of the company. Howard Bluver is President & Chief Executive Officer.
  • Frank Filipo purchased 200 shares on April 29, and currently holds 5,787 shares or less than 0.1% of the company. Frank Filipo is Executive Vice President & Operating Officer.
  • John Stark purchased 62 shares on April 24, and currently holds 36,136 shares or 0.3% of the company. John Stark serves as a director of the company.
  • Susan O'Shea purchased 220 shares on April 24, and currently holds 29,238 shares or 0.3% of the company. Susan O'Shea serves as a director of the company.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
May 2013 1,000 0
April 2013 5,482 0
March 2013 291 0
February 2013 6,759 0
January 2013 317 0
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There have been 13,849 shares purchased and zero shares sold this year.

Financials

The company reported the first-quarter financial results on April 24, with the following highlights:

Net income $2.7 million
Book value $14.31 per share
Tangible book value $14.07 per share
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Competition

Suffolk Bancorp's competitors include First of Long Island Corp. (NASDAQ:FLIC) and JPMorgan Chase & Co. (NYSE:JPM). Here is a table comparing these companies.

Company SUBK FLIC JPM Industry Average (Regional - Northeast Banks)
Market Cap: 177.19M 271.32M 183.58B 538.02M
Employees: 373 255 255,898 827.00
Qtrly Rev Growth (yoy): 0.03 0.04 0.01 0.05
Revenue: 59.64M 66.66M 90.84B 173.31M
Operating Margin: 0.06 0.44 0.36 0.33
Net Income: -207.00K 20.39M 21.43B N/A
EPS: -0.02 2.27 5.60 0.81
P/E: N/A 13.21 8.58 13.36
PEG (5 yr expected): N/A 1.77 1.23 2.40
P/S: 2.97 4.07 2.02 3.10
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Suffolk's P/S ratio is in line with the industry average.

My analysis

There have been five different insiders buying the shares and there have not been any insiders selling the shares during the past 30 days. The stock has an $18 price target from the Point and Figure chart. I believe the stock could be a good pick at the book value of $14.31 per share.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in KEG 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.