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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. MFA Financial (NYSE:MFA), a real estate investment trust [REIT], invests in residential agency and non-agency mortgage-backed securities [MBS].

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Insider buying by insider (last 30 days)

  • Stephen Yarad purchased 1,325 shares of 7.5% Series B Cumulative Redeemable Preferred Stock on May 17. Stephen Yarad is Chief Financial Officer of the company.
  • Matthew Ottinger purchased 6,583 shares of 7.5% Series B Cumulative Redeemable Preferred Stock on May 20. Matthew Ottinger is Senior Vice President of the company.
  • Ronald Freydberg purchased 3,000 shares of 7.5% Series B Cumulative Redeemable Preferred Stock on May 6. Ronald Freydberg is Executive Vice President of the company.

Insider buying by calendar month

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

MonthInsider buying / sharesInsider selling / shares
May 201310,9080
April 201300
March 201300
February 201300
January 201300

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

Financials

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

Net income$75.0 million
Book value$8.84 per share

Competition

MFA Financial's competitors include Annaly Capital Management (NYSE:NLY), Capstead Mortgage Corp. (NYSE:CMO) and iStar Financial (SFI). Here is a table comparing these companies.

CompanyMFANLYCMOSFIIndustry Average (REIT - Diversified)
Market Cap:3.28B13.66B1.17B1.01B3.65B
Employees:3714713170250.00
Qtrly Rev Growth (yoy):-0.08-0.05-0.23N/A0.00
Revenue:340.58M2.13B167.08M-21.84M560.72M
Gross Margin:1.001.001.00N/A0.90
EBITDA:N/AN/AN/AN/A360.42M
Operating Margin:0.900.900.9215.830.51
Net Income:289.89M1.65B132.00M-284.22MN/A
EPS:0.811.691.37-3.092.19
P/E:11.208.528.94N/A3.69
PEG (5 yr expected):2.392.021.25N/AN/A
P/S:9.706.427.04N/A6.50

MFA Financial's 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 0.79%. The stock is trading at a P/E ratio of 11.20 and a forward P/E ratio of 10.20. The company has a book value of $8.84 per share and the stock has a dividend yield of 9.69%. The 200 -day moving average is currently at $8.03, which could be a good entry point for the stock.

2. Silver Bay Realty Trust Corp (NYSE:SBY) is a newly organized Maryland corporation focused on the acquisition, renovation, leasing and management of single-family properties. The company intends to elect and qualify to be taxed as a REIT for U.S. federal income tax purposes.

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Insider buying by insider (last 30 days)

  • Brian Taylor purchased 581 shares on May 23 and currently holds 30,462 shares or less than 0.1% of the company. Brian Taylor has served as Chairman of the Board of Silver Bay Realty Trust Corp. since 2012.
  • Timothy O'Brien purchased 3,000 shares on May 21 and currently holds 7,714 shares or less than 0.1% of the company. Timothy O'Brien has been General Counsel and Secretary since Silver Bay's incorporation in July 2012.
  • David Miller purchased 5,000 shares on May 21 and currently holds 27,770 shares or less than 0.1% of the company. David Miller is President and CEO of the company.
  • Irvin Kessler purchased 54,623 shares on May 21 and currently controls 2,168,795 shares or 5.5% of the company. Irvin Kessler serves as a director of the company.

Insider buying by calendar month

Here is a table of Silver Bay Realty Trust's insider trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
May 201363,2040
April 201300
March 201337,7540
February 201300
January 201300

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

Financials

The company reported the first-quarter financial results on May 13 with the following highlights:

Revenue$7.7 million
Net loss$6.4 million
Cash$92.2 million

Outlook

The company estimates that home prices in its core markets remain below replacement cost and are in some cases as high as 50% off peak pricing. Silver Bay believes it is still an attractive environment to continue acquiring in select markets.

The dynamics in the housing and rental markets continue to be favorable to the company's strategy. First, sales of distressed properties remain robust. Second, supply of available housing remains constrained both in the for sale and rental markets.

Third, demand for single family rental properties remains strong and overall demand for housing purchases is growing due to an improved macroeconomic environment and increased household formation. Fourth, credit remains tight with high levels of negative homeowner equity, low levels of consumer savings and tighter lending standards all contributing to high rental demand. And last, it appears that rents are trending upwards, although not at the same speed as home prices.

Competition

Here is a table comparing Silver Bay Realty Trust against the Residential REIT industry.

CompanySBYIndustry Average (REIT - Residential)
Market Cap:733.88M16.92B
Employees:N/A2.18K
Qtrly Rev Growth (yoy):175.580.10
Revenue:11.25M1.10B
Gross Margin:-0.320.75
EBITDA:-5.87M618.40M
Operating Margin:-1.030.20
Net Income:-7.52MN/A
EPS:-0.194.25
P/E:N/A49.72
PEG (5 yr expected):N/A2.94
P/S:64.6215.43

Silver Bay Realty Trust 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. The company has an insider ownership of 0.32%. There is one analyst buy rating, one neutral rating and zero sell ratings with an average target price of $21.00. The stock is trading at a forward P/E ratio of 42.43. The company has a book value of $17.50 per share and the stock has a dividend yield of 0.21%. I believe the stock could be a good pick at the book value.

3. Franklin Street Properties Corp. (NYSEMKT:FSP) provides real estate and investment banking/investment services in the United States. The company has elected to be taxed as a REIT.

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Insider buying by insider (last 30 days)

  • Jeffrey Carter purchased 1,250 shares on May 23 and currently holds 7,425 shares or less than 0.1% of the company. Jeffrey Carter is Executive Vice President, Chief Investment Officer of the company.
  • John Demeritt purchased 1,000 shares on May 23 and currently holds 22,000 shares or less than 0.1% of the company. John Demeritt is Executive Vice President, Chief Financial Officer of the company.
  • Brian Hansen purchased 6,000 shares on May 21 and currently holds 14,440 shares or less than 0.1% of the company. Brian Hansen has been a director of the company since November 2012.
  • George Carter purchased 5,000 shares on May 16 and currently holds 976,531 shares or 1.0% of the company. George Carter is CEO and President, Chairman of the Board.

Insider buying by calendar month

Here is a table of Franklin Street Properties' insider trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
May 201313,2500
April 201300
March 20135,0000
February 201300
January 201300

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

Financials

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

Revenue$44.8 million
Funds From Operations [FFO]$20.6 million
Net income$4.4 million
Cash$17.3 million
Debt$622.5 million

On May 15 Franklin Street Properties announced that it had closed its previously announced underwritten public offering of 17,250,000 shares of its common stock, including 2,250,000 shares purchased by the underwriters pursuant to the exercise in full of the underwriters' option to purchase additional shares. The company received approximately $231.3 million in net proceeds from the offering.

Outlook

The company anticipates organic growth in rental revenue and FFO from its existing portfolio properties in the second half of this year as Franklin Street Properties begins to realize the benefit of significant new leases signed in recent quarters and as continuing same-store rental increases positively affect profits.

Competition

Here is a table comparing Franklin Street Properties to the industry leaders.

FSP vs. Industry Leaders
StatisticIndustry LeaderFSPFSP Rank
Market CapitalizationBXP17.06B1.16B24 / 39
PEG Ratio (5 yr expected)MPG30.981.52N/A
Revenue Growth (Qtrly YoY)K71U.SIN/A13.40%16 / 39
EPS Growth (Qtrly YoY) -23.30%13 / 39
Long-Term Growth Rate (5 yr)COR16.50%8.70%N/A
Return on EquityGYRO224.91%2.46%28 / 39
Long-Term Debt/Equity 72.910N/A
Dividend Yield (annual)SIR 5.50%4 / 39

Franklin Street Properties is ranked #4 in the annual dividend yield.

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 has an insider ownership of 0.93%. The stock is trading at a P/E ratio of 53.58 and a forward P/E ratio of 60.57. The company has a book value of $10.29 per share and the stock has a dividend yield of 5.46%. The 200 -day moving average is currently at $12.35, which could be a good entry point for the stock.

Source: 3 Financial REITs With Recent Intensive Insider Buying