1 Tech Stock, 1 Bank And 1 Gold Miner With Recent Intensive Insider Buying

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Includes: NWFL, RIOM, STRM
by: Markus Aarnio

Since my article April 19, titled "1 Energy, 1 Gold And A Software Company With Recent Intensive Insider Buying," the stocks that I featured have performed as follows:

Company

Price 4/19

Price 5/3

Change

Vermilion Energy (NYSE:VET)

$46.22

$50.24

+8.7%

Rally Software Development (NYSE:RALY) $17.19 $19.03 +10.7%
AuRico Gold (NYSE:AUQ) $4.84 $4.96 +2.5%
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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. Streamline Health Solutions (NASDAQ:STRM) provides workflow and document management technology solutions that enhance efficiencies and business processes for hospitals and physician groups in North America.

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Insider buying by insider (last 30 days)

  • Robert Watson purchased 2,750 shares on April 30 and currently holds 195,798 shares or 1.6% of the company. Robert Watson was appointed President and Chief Executive Officer in 2011.
  • Jonathan Phillips purchased 5,000 shares on April 30 and currently holds 372,914 shares or 3.0% of the company. Jonathan Phillips has been a Director of the company since May 2005 and was appointed Chairman of the Board effective May 27, 2009.
  • Herbert Larsen purchased 900 shares on April 30 and currently holds 900 shares or less than 0.1% of the company. Herbert Larsen is Senior Vice President, Client Services.
  • Michael Schiller purchased 1,000 shares on April 29 and currently holds 1,000 shares or less than 0.1% of the company. Michael Schiller joined the company in 2012 as Senior Vice President, Sales.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
April 2013 9,650 0
March 2013 0 0
February 2013 0 0
January 2013 0 681,332
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The month of April has seen all of the insider buying.

Financials

The company reported the fiscal year 2012, which ended January 31, financial results on April 24 with the following highlights:

Revenue $23.8 million
Net loss $5.6 million
Cash $7.5 million
Debt $13.7 million
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Outlook

Backlog at January 31, 2013 increased 86% to $51.0 million compared with $27.4 million at January 31, 2012. The increase in the current backlog reflects significant new SaaS contract signings as well as current clients purchasing additional solutions.

The company projects approximately 47% to 56% growth in net revenue in 2013 over 2012. That translates into revenue in the range of $35 million to $37 million. In addition, the company anticipates adjusted EBITDA to grow between 16% and 39% in 2013. This will project adjusted EBITDA in the range of $7.5 million to $9 million.

Competition

Streamline's competitors include Cerner Corporation (NASDAQ:CERN) and McKesson Corporation (NYSE:MCK). Here is a table comparing these companies.

Company STRM CERN MCK Industry Average (Healthcare Information Services)
Market Cap: 80.16M 16.63B 25.18B 1.19B
Employees: N/A 11,900 37,700 1.50K
Qtrly Rev Growth (yoy): 0.49 0.06 0.01 0.31
Revenue: 23.77M 2.65B 123.53B 469.87M
Gross Margin: 0.51 0.80 0.06 0.59
EBITDA: 1.78M 743.45M 2.85B 31.46M
Operating Margin: 0.02 0.23 0.02 0.11
Net Income: -5.55M 418.56M 1.60B N/A
EPS: -0.48 2.37 6.60 -0.36
P/E: N/A 40.79 16.39 N/A
PEG (5 yr expected): 4.25 1.87 1.15 1.21
P/S: 3.40 6.30 0.20 2.53
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Streamline is growing faster than the industry.

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 two analyst buy ratings, zero neutral ratings and zero sell ratings, with an average target price of $8.25. The stock is trading at a forward P/E ratio of 28.82 and the company has a book value of $1.31 per share. The 200-day moving average is currently at $5.45, which could be a good entry point for the stock.

2. Norwood Financial Corp. (NASDAQ:NWFL) operates as the holding company for Wayne Bank that provides various financial services to consumers, businesses, nonprofit organizations, and municipalities in Pennsylvania.

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Insider buying by insider (last 30 days)

  • William Lance purchased 200 shares on May 3 and currently holds 600 shares or less than 0.1% of the company. William Lance is Executive Vice President & CFO.
  • Andrew Forte purchased 268 shares on April 22 and currently controls 2,978 shares or less than 0.1% of the company. Andrew Forte serves as a director of the company.
  • Robert Mancuso purchased 1,000 shares on April 22 and currently controls 1,883 shares or less than 0.1% of the company. Robert Mancuso is Senior Vice President.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
May 2013 200 0
April 2013 1,268 0
March 2013 0 0
February 2013 100 4,200
January 2013 0 0
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There have been 1,568 shares purchased and 4,200 shares sold this year.

Financials

The company reported the first-quarter financial results on April 19 with the following highlights:

Net income $2.3 million
Book value $25.66 per share
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Competition

Norwood's competitors include Fidelity D&D Bancorp (OTCPK:FDBC), NBT Bancorp (NASDAQ:NBTB) and The PNC Financial Services Group (NYSE:PNC). Here is a table comparing these companies.

Company NWFL FDBC NBTB PNC Industry Average (Regional - Northeast Banks)
Market Cap: 111.28M 54.48M 725.18M 36.03B 60.36M
Employees: 143 159 1,581 50,942 134.00
Qtrly Rev Growth (yoy): 0.01 -0.05 0.06 0.04 0.24
Revenue: 27.57M 24.90M 272.49M 14.69B 304.45M
Operating Margin: 0.44 0.29 0.33 0.27 0.35
Net Income: 8.52M 4.90M 48.56M 2.99B N/A
EPS: 2.58 2.14 1.41 5.63 0.66
P/E: 11.96 10.94 14.14 12.11 14.34
PEG (5 yr expected): N/A N/A 2.54 1.29 1.09
P/S: 4.05 2.19 2.63 2.42 4.26
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Norwood's valuation is in line with the industry average.

My analysis

There have been three different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. The stock is trading at a P/E ratio of 11.96 and the company has a book value of $25.66 per share. The 200-day moving average is currently at $29.30, which could be a good entry point for the stock.

3. Sulliden Gold Corporation (SDDDF.PK) engages in the acquisition, exploration, and development of metal properties in Peru and Canada.

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Insider buying by insider (last 30 days)

  • Agnico-Eagle Mines (NYSE:AEM) purchased 26,966,292 shares on April 9 pursuant to a private placement. Agnico-Eagle Mines currently holds 26,966,292 shares and 18,876,404 warrants or 14.6% of the company.
  • Denis Arsenault purchased 185,000 shares on April 26-30 and currently holds 194,500 shares or less than 0.1% of the company. Denis Arsenault is Chief Financial Officer.
  • Pierre Pettigrew purchased 24,000 shares on May 2 and currently holds 99,000 shares or less than 0.1% of the company. Pierre Pettigrew serves as a director of the company.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
May 2013 24,000 0
April 2013 27,151,292 0
March 2013 0 45,000
February 2013 50,000 0
January 2013 0 0
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There have been 27,225,292 shares purchased and 45,000 shares sold this year.

Financials

The company reported the fiscal 2013 third-quarter, which ended January 31, financial results on March 12 with the following highlights:

Revenue $0
Net loss $2.9 million
Cash $20.0 million
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On April 12, Sulliden closed the $24,000,000 private placement financing with Agnico-Eagle Mines Limited.

As announced on November 8, 2012, the company has entered into a mandate letter with Credit Suisse AG and Barclays Bank PLC to arrange a limited recourse project finance facility of up to $125 million for the construction and development of Shahuindo.

Completion of Shahuindo Feasibility Study

On September 26, 2012, the company announced the results of a positive Feasibility Study to develop Shahuindo. Highlights of the Feasibility Study are as follows:

  • Pre-production capital costs of $131.8 million.
  • 10,000 tonnes per day operation producing 87,700 oz of gold equivalent per annum.
  • Pre-tax Internal Rate of Return of 52.2%.
  • After-tax Internal Rate of Return of 37.8%.
  • Net Present Value @ 5% (Pre-tax) of $382.9 million.
  • Net Present Value @ 5% (After-tax) of $248.6 million.
  • Total cash operating costs of $552/oz gold.
  • LOM average gold grade of 0.84 g/t and average silver grade of 9.50 g/t.

Upcoming milestones

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Competition

Sulliden competes with many other mining companies that have substantially greater resources. Such competition may result in Sulliden being unable to acquire desired properties, recruit or retain qualified employees or acquire the capital necessary to fund its operations and develop its properties. Sulliden's inability to compete with other mining companies for these resources would have a material adverse effect on Sulliden's results of operations and business.

My analysis

There have been three 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, zero neutral ratings and zero sell ratings, with an average target price of $1.75. The company's goal is to reach production in 2014. I have a cautiously bullish bias for the stock currently based on the intensive insider buying.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within 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.