3 Financial Sector Small Caps With Recent Intensive Insider Buying

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 |  Includes: IBTX, ONB, PPBI
by: Markus Aarnio

Since my article March 18, titled "3 Financial Sector Stocks With Recent Intensive Insider Buying," the stocks that I featured have performed as follows:

Company

Price 3/15

Price 5/10

Change

ARMOUR Residential REIT (NYSE:ARR)

$6.37

$6.31

-0.9%

Element Financial Corporation (OTC:ELEEF) $8.70 $9.89 +13.7%
Artisan Partners Asset Management (NYSE:APAM) $37.05 $43.35 +17.0%
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In this article, I will feature three additional financial sector 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. Old National Bancorp (NYSE:ONB) operates as the bank holding company for Old National Bank, which provides financial services to individuals and commercial customers in the United States.

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Insider buying by insider (last 30 days)

  • Andrew Goebel purchased 2,176 shares on May 9 and currently holds 8,419 shares or less than 0.1% of the company. Andrew Goebel has been a director of the company since 2000.
  • John Kamin purchased 1,000 shares on May 2 and currently holds 5,190 shares or less than 0.1% of the company. John Kamin is Executive Vice President and Chief Information Officer of Old National Bancorp, having joined the company in July 2011.
  • Christopher Wolking purchased 500 shares on May 1 and currently holds 3,434 shares or less than 0.1% of the company. Christopher Wolking is Senior Executive Vice President and Chief Financial Officer of Old National Bancorp.
  • Randall Shepard purchased 1,000 shares on May 1 and currently holds 8,000 shares or less than 0.1% of the company. Randall Shepard was appointed to the Old National Bancorp Board of Directors in July 2012 and is an independent director of the company.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
May 2013 4,684 0
April 2013 0 0
March 2013 225 0
February 2013 0 0
January 2013 0 0
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The month of May has seen the most insider buying this year.

Financials

The company reported the first-quarter financial results on April 29 with the following highlights:

Net income $23.9 million
Book value $11.83 per share
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Competition

Old National Bancorp's competitors include Fifth Third Bancorp (NASDAQ:FITB), Huntington Bancshares (NASDAQ:HBAN) and JPMorgan Chase & Co. (NYSE:JPM). Here is a table comparing these companies.

Company ONB FITB HBAN JPM
Market Cap: 1.29B 15.49B 6.28B 186.94B
Employees: 2,589 20,744 12,052 255,898
Qtrly Rev Growth (yoy): 0.03 0.05 -0.02 0.01
Revenue: 496.74M 6.33B 2.68B 90.84B
Operating Margin: 0.32 0.39 0.37 0.36
Net Income: 93.88M 1.52B 607.62M 21.43B
EPS: 0.96 1.67 0.71 5.60
P/E: 13.32 10.62 10.55 8.74
PEG (5 yr expected): 3.19 2.23 1.96 1.23
P/S: 2.58 2.43 2.32 2.06
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Old National Bancorp's valuation is in line with its direct competitors.

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 four analyst buy ratings, six neutral ratings and zero sell ratings, with an average target price of $13.29. The stock is trading at a P/E ratio of 13.32 and a forward P/E ratio of 12.14. The company has a book value of $11.83 per share and the stock has a dividend yield of 3.14%. I believe the stock could be a good pick at the book value of $11.83 per share.

2. Pacific Premier Bancorp (NASDAQ:PPBI) operates as the bank holding company for Pacific Premier Bank that provides banking services to businesses and consumers in Southern California.

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Insider buying by insider (last 30 days)

  • Joseph Garrett purchased 7,630 shares on April 26 - May 8 and currently holds 35,955 shares or 0.2% of the company. Joseph Garrett serves as a director of the company.
  • Kenneth Boudreau purchased 3,500 shares on May 1 and currently holds 27,367 shares or 0.2% of the company. Kenneth Boudreau serves as a director of the company.
  • Jeff Jones purchased 8,000 shares on April 26 and currently holds 72,602 shares or 0.5% of the company. Jeff Jones is Chairman of the Board.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
May 2013 4,000 0
April 2013 15,130 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 19,130 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 $2.0 million
Book value $10.21 per share
Tangible book value $9.15 per share
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Competition

Pacific Premier Bancorp's competitors include Bank of America Corporation (NYSE:BAC) and U.S. Bancorp (NYSE:USB). Here is a table comparing these companies.

Company PPBI BAC USB
Market Cap: 191.42M 140.36B 61.94B
Employees: N/A 263,000 64,486
Qtrly Rev Growth (yoy): 0.31 0.15 0.01
Revenue: 55.63M 77.99B 17.64B
Operating Margin: 0.42 0.16 0.46
Net Income: 15.06M 3.54B 5.46B
EPS: 1.25 0.32 2.90
P/E: 9.93 40.69 11.55
PEG (5 yr expected): 1.74 0.59 1.12
P/S: 3.47 1.78 3.49
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Pacific Premier Bancorp's P/E ratio is below its direct competitors'.

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 five analyst buy ratings, zero neutral ratings and zero sell ratings, with an average target price of $14.50. The stock is trading at a P/E ratio of 9.93 and a forward P/E ratio of 10.00. The company has a book value of $10.21 per share. I believe the stock could be a good pick at the book value of $10.21 per share.

3. Independent Bank Group (NASDAQ:IBTX) operates as a bank holding company for Independent Bank that provides commercial banking products and services for small to medium size businesses, professionals, and individuals in North and Central Texas.

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Insider buying by insider (last 30 days)

  • Stacy Smith purchased 5,927 shares on May 7-9 and currently holds 82,350 shares or 0.7% of the company. Stacy Smith was elected to the Board of Directors in February 2013.
  • Michelle Hickox purchased 1,500 shares on May 7 and currently holds 9,500 shares or less than 0.1% of the company. Michelle Hickox is Executive Vice President and Chief Financial Officer of the company.
  • Craig Holmes purchased 3,500 shares on May 3 and currently holds 4,460 shares or less than 0.1% of the company. Craig Holmes was elected to the Board of Directors in February 2013.
  • Brian Hobart purchased 500 shares on May 3 and currently holds 211,011 shares or 1.8% of the company. Brian Hobart is Vice Chairman and Chief Lending Officer of the company and President Independent Bank Central Texas.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
May 2013 11,427 0
April 2013 170,438 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 181,865 shares purchased and zero shares sold since the IPO in April.

Financials

The company reported the first-quarter financial results on April 30 with the following highlights:

Net income $5.7 million
Dividend $0.65 per share
Book value $15.01 per share
Tangible book value $11.16 per share
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Competition

Independent Bank competes in the commercial banking industry and firmly believes that the bank's long-standing presence in the community and personal service philosophy enhances its ability to attract and retain customers. This industry is highly competitive, and the bank faces strong direct competition for deposits, loans, and other financial-related services. Independent Bank competes with other commercial banks, thrifts and credit unions. Although some of these competitors are situated locally, others have statewide or nationwide presence. In addition, Independent Bank competes with large banks in major financial centers and other financial intermediaries, such as consumer finance companies, brokerage firms, mortgage banking companies, insurance companies, securities firms, mutual funds and certain government agencies as well as major retailers, all actively engaged in providing various types of loans and other financial services.

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 stock is trading at a P/E ratio of 16.27 and a forward P/E ratio of 14.95. The company has a book value of $15.01 per share and the stock has a dividend yield of 9.0%. I have a neutral bias for the stock currently based on the stock's significant premium to the book value.

Disclosure: I am long ARR. 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.