1 Financial And 1 Basic Materials Stock With Recent Intensive Insider Buying

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 |  Includes: FCMGF, HUSKF
by: Markus Aarnio

There was intensive insider buying in Fisher Communications (FSCI) in November 2012, when the stock was trading at $24. The stock is currently trading at $41.20 or 83.6% above the low made in November 2012.

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With this episode in mind, I screened for stocks, which have seen recent intensive insider buying. 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%.

In this article, I will feature two stocks that have seen intensive insider buying during the last 30 days.

1. Husky Energy (OTCPK:HUSKF) operates as an integrated energy company primarily in Canada and the United States.

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Insider buying by insider (last 30 days)

  • Alister Cowan purchased 7,000 shares on June 4 and currently holds 7,000 shares or less than 0.1% of the company. Alister Cowan is Chief Financial Officer of the company.
  • Asim Ghosh purchased 16,600 shares on May 29-31 and currently holds 60,925 shares or less than 0.1% of the company. Asim Ghosh is President & Chief Executive Officer of the company.
  • Frederick Ma purchased 10,000 shares on May 31 and currently holds 10,000 shares or less than 0.1% of the company. Frederick Ma has been a Director of Husky Energy since July 2010.
  • Terry Manning purchased 1,255 shares on June 14 and currently holds 1,993 shares or less than 0.1% of the company. Terry Manning is Senior Vice President, Safety, Engineering & Procurement Husky Oil Operations Limited.
  • Robert Peabody purchased 6,500 shares on May 27 and currently holds 42,000 shares or less than 0.1% of the company. Robert Peabody is Chief Operating Officer of the company.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
June 2013 8,255 0
May 2013 33,100 0
April 2013 0 0
March 2013 4,000 0
February 2013 7,380 0
January 2013 0 0
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There have been 52,735 shares purchased and zero shares sold by the insiders this year.

Financials

The company reported the first-quarter financial results on May 7 with the following highlights:

Revenue $5.6 billion
Net income $535 million
Cash $1.9 billion
Debt $4.0 billion
Oil production 321,000 boe/d
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Outlook

The company's 2013 production guidance is 310-330 mboe/d.

Competition

The energy industry is highly competitive with respect to gaining access to the resources required to increase oil and gas reserves and production and gain access to markets. Husky competes with others to acquire prospective lands, retain drilling capacity and field operating and construction services, obtain sufficient pipeline and other transportation capacity, gain access to and retain adequate markets for its products and services, and gain access to capital markets. Husky's ability to successfully complete development projects could be adversely affected if it is unable to acquire economic supplies and services due to competition. Subsequent increases in the cost of or delays in acquiring supplies and services could result in uneconomic projects. Husky's competitors comprise all types of energy companies, some of which have greater resources.

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 is one analyst buy rating, 15 neutral ratings and two sell ratings with an average target price of $32.80. The stock is trading at a P/E ratio of 14.32 and a forward P/E ratio of 11.83. The company has a book value of $19.54 per share and the stock has a dividend yield of 4.20%. The stock is currently trading right at its 200-day moving average, which could be a good entry point for the stock.

2. Firm Capital Mortgage Investment Corporation (OTC:FCMGF) offers residential and commercial real estate finance.

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Insider buying by insider (last 30 days)

  • Eli Dadouch purchased 5,600 shares on May 31 and currently holds 203,609 shares or 1.2% of the company. Eli Dadouch is President & CEO of the company.
  • Jonathon Mair purchased 20,000 shares on May 31 and currently holds 20,000 shares or 0.1% of the company. Jonathon Mair is Chief Financial Officer of the company.
  • Robert McKee purchased 2,000 shares on May 31 and currently holds 3,409 shares or less than 0.1% of the company. Robert McKee is Vice President Finance and Operations.
  • Sandy Poklar purchased 2,000 shares on May 30 and currently controls 2,000 shares or less than 0.1% of the company. Sandy Poklar is Chief Operating Officer of the company.

Insider buying by calendar month

Here is a table of Firm Capital Mortgage Investment Corporation's insider trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
May 2013 29,600 0
April 2013 0 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 29,600 shares purchased and zero shares sold by the insiders this year.

Financials

The company reported the first-quarter financial results on May 7 with the following highlights:

Net income $4.2 million
Net debt $138.1 million
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Outlook

In 2013, the company anticipates meeting and exceeding its stated targeted return on equity that exceeds 400 basis points over the average one year Government of Canada Treasury Bill yields. This yield target is substantial in this current investment environment.

Competition

While Firm Capital Mortgage Investment Corporation's management does not anticipate significant competition in the market niches in which Firm Capital invests, Firm Capital competes with individuals, corporations and institutions for investment opportunities in the financing of real property. Certain of these competitors may have greater resources than Firm Capital and may therefore operate with greater flexibility.

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 13.29 and the stock has a dividend yield of 8.11%. The company has a book value of $10.36 per share, which could be a good entry point for the stock.

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