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The financial sector has been the best-performing group over the recent one-year period with a gain of 39.5%.

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In this article I will feature three 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. Harris & Harris Group (NASDAQ:TINY) is a venture capital firm specializing in early stage investments.

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Insider buying by insider (last 30 days)

  • Douglas Jamison purchased 5,000 shares on May 14-16 and currently holds 192,334 shares or 0.6% of the company. Douglas Jamison has served as Chairman and Chief Executive Officer since January 2009.
  • Richard Shanley purchased 2,300 shares on May 15 pursuant to a Rule 10b5-1 purchase plan. Richard Shanley currently holds 40,294 shares or 0.1% of the company. Richard Shanley serves as a director of the company.
  • Dillaway Ayres purchased 1,700 shares on May 15 pursuant to a Rule 10b5-1 purchase plan. Dillaway Ayres currently holds 33,584 shares or 0.1% of the company. Dillaway Ayres serves as a director of the company.
  • James Roberts purchased 1,500 shares on May 15 pursuant to a Rule 10b5-1 purchase plan. James Roberts currently holds 55,136 shares or 0.2% of the company. James Roberts has been the Lead Independent Director since May 5, 2011.
  • Charles Ramsey purchased 4,100 shares on May 15 pursuant to a Rule 10b5-1 purchase plan. Charles Ramsey currently holds 67,049 shares or 0.2% of the company. Charles Ramsey serves as a director of the company.
  • Phillip Bauman purchased 1,800 shares on May 15 pursuant to a Rule 10b5-1 purchase plan. Phillip Bauman currently holds 53,907 shares or 0.2% of the company. Phillip Bauman serves as a director of the company.
  • Bruce Shewmaker purchased 1,827 shares on May 15 pursuant to a Rule 10b5-1 purchase plan. Bruce Shewmaker currently holds 11,673 shares or less than 0.1% of the company. Bruce Shewmaker serves as a director of the company.
  • Lucio Lanza purchased 6,900 shares on May 15 pursuant to a Rule 10b5-1 purchase plan. Lucio Lanza currently holds 23,422 shares or less than 0.1% of the company. Lucio Lanza serves as a director of the company.

Insider buying by calendar month

Here is a table of Harris & Harris Group's insider trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
May 201325,1270
April 20131,6300
March 20138,5500
February 201300
January 20131,2750

The month of May has seen the most insider buying this year.

Financials

The company reported the first-quarter financial results on May 10 with the following highlights:

Revenue$0.2 million
Net loss$2.0 million
Net Asset Value$4.11 per share

Competition

Numerous companies and individuals are engaged in the venture capital business, and such business is intensely competitive. Harris & Harris believes its corporate structure permits public market investors to participate in venture capital and to participate in the commercialization of science-related breakthroughs, particularly those enabled by nanotechnology, while many of the leading companies are still private. Harris & Harris also believes its corporate structure permits greater liquidity and better transparency than other venture capital businesses. Harris & Harris believes that it has invested in more nanotechnology-enabled small businesses than any venture capital firm and that it has assembled a team of investment professionals that, in addition to a proven track record of successful venture capital investing, have scientific and intellectual property expertise that is relevant to investing in science-related breakthroughs, particularly those enabled by nanotechnology. Nevertheless, many of Harris & Harris' competitors have significantly greater financial and other resources than Harris & Harris does and are, therefore, in certain respects, in a better position than Harris & Harris is to obtain access to attractive venture capital investments.

My analysis

There have been eight different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. The company has an insider ownership of 3.09%. I believe the stock could be a good pick below the Net Asset Value.

2. Five Oaks Investment Corp. (NYSE:OAKS) is a real estate investment trust [REIT] focused on investing in, financing and managing a portfolio of residential mortgage-backed securities, residential mortgage loans and other mortgage related investments.

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Insider buying by insider (last 30 days)

  • Neil Cummins purchased 8,531 shares on May 13 and currently holds 10,031 shares or 0.1% of the company. Neil Cummins has been a director of Five Oaks since 2013.
  • Kian Fui Chong purchased 4,600 shares on May 8 and currently holds 13,095 shares or 0.2% of the company. Kian Fui Chong is Chief Investment Officer of the company.
  • David Oston purchased 1,600 shares on May 8 and currently holds 26,569 shares or 0.4% of the company. David Oston is Chief Financial Officer, Treasurer and Secretary of the company.
  • David Carroll purchased 3,000 shares on May 8 and currently holds 40,455 shares or 0.5% of the company. David Carroll is Chief Executive Officer, President and Chairman of the company.

Insider buying by calendar month

Here is a table of Five Oaks' insider trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
May 201317,7310
April 201300
March 20131,666,6670
February 201300
January 201300

There have been 1,684,398 shares purchased and zero shares sold this year.

Financials

The company reported the first-quarter financial results on May 3 with the following highlights:

Net income$1.5 million
Book value$15.77 per share

Competition

Five Oaks' net income will depend, in large part, on its ability to acquire assets at favorable spreads over its borrowing costs. In acquiring Agency and Non-Agency RMBS, Five Oaks will compete with other REITs, specialty finance companies, savings and loan associations, banks, mortgage bankers, insurance companies, mutual funds, institutional investors, investment banking firms, financial institutions, governmental bodies and other entities.

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 company's current monthly dividend is $0.16 per share for May and June. I believe the stock could be a good pick below the book value.

3. Crescent Financial Bancshares (CRFN) operates as the bank holding company for Crescent State Bank that provides commercial and retail banking services to individuals and small-to-medium sized businesses in North Carolina.

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Insider buying by insider (last 30 days)

  • David Therit purchased 1,000 shares on May 9 and currently holds 1,000 shares or less than 0.1% of the company. David Therit is Principal Accounting Officer of the company.
  • Joseph Lamb purchased 38,000 shares on May 9-10 and currently holds 217,390 shares or 0.5% of the company. Joseph Lamb serves as a director of the company.
  • Terry Earley purchased 3,400 shares on May 6 and currently holds 10,600 shares or less than 0.1% of the company. Terry Earley is Chief Financial Officer of the company.

Insider buying by calendar month

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

Month

Insider buying / shares

Insider selling / shares

May 2013

42,400

0

April 2013

0

0

March 2013

2,000

0

February 2013

9,935

0

January 2013

0

0

The month of May has seen the most insider buying this year.

Financials

The company reported the first-quarter financial results on May 1 with the following highlights:

Net loss

$1.2 million

Book value

$4.13 per share

Tangible book value

$3.33 per share

Competition

Crescent Financial Bancshares' competitors include Bank of America Corporation (NYSE:BAC), BB&T Corporation (NYSE:BBT) and PNC Financial Services Group (NYSE:PNC). Here is a table comparing these companies.

Company

CRFN

BAC

BBT

PNC

Industry Average (Regional - Mid-Atlantic Banks)

Market Cap:

149.83M

144.78B

22.84B

37.83B

13.35M

Employees:

242

263,000

34,000

50,947

N/A

Qtrly Rev Growth (yoy):

-0.00

0.15

0.07

0.04

0.00

Revenue:

47.50M

77.99B

8.75B

14.66B

9.81M

Operating Margin:

0.12

0.16

0.39

0.28

0.21

Net Income:

1.46M

3.54B

1.70B

2.99B

N/A

EPS:

0.04

0.32

2.38

5.63

0.62

P/E:

102.20

41.97

13.68

12.71

11.32

PEG (5 yr expected):

N/A

0.59

1.34

1.35

N/A

P/S:

3.15

1.85

2.58

2.54

1.36

Crescent Financial Bancshares' P/S ratio is above 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 company has an insider ownership of 71.67%. The stock is trading at a P/E ratio of 102.20 and a forward P/E ratio of 11.64. I believe the stock could be a good pick at the tangible book value of $3.33 per share.

Source: 3 Financial Sector Stocks With Recent Intensive Insider Buying