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The Vanguard REIT Index ETF (VNQ) was trading as low as $19.95 in March 2009. The index is currently trading at $67.79, or 239.8% above the low made in March 2009.

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In this article, I will feature two REITs 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. Ares Commercial Real Estate Corporation (ACRE), a specialty finance company, operates as a real estate investment trust [REIT].

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Insider buying by insider (last 30 days)

  • Todd Schuster purchased 30,000 shares on June 20 pursuant to a public offering. Todd Schuster currently controls 37,027 shares or 0.1% of the company. Todd Schuster is the Co-Chief Executive Officer of ACRE and also serves as a Director of ACRE and a member of the manager's Investment Committee.
  • John Bartling purchased 22,222 shares on June 20 pursuant to a public offering. John Bartling currently holds 35,722 shares or 0.1% of the company. John Bartling is the Co-Chief Executive Officer of ACRE, and also serves as a Director of ACRE and chairman of the manager's Investment Committee.
  • Michael Weiner purchased 11,111 shares on June 20 pursuant to a public offering. Michael Weiner currently holds 11,111 shares or less than 0.1% of the company. Michael Weiner is General Counsel and Vice President of ACRE.
  • Michael Arougheti purchased 150,000 shares on June 20 pursuant to a public offering. Michael Arougheti currently holds 196,800 shares or 0.7% of the company. Michael Arougheti is the Chairman of ACRE's Board of Directors, and serves as a Director of ACRE and a member of the manager's Investment Committee.
  • Robert Rosen purchased 18,000 shares on June 20 pursuant to a public offering. Robert Rosen currently holds 35,027 shares or 0.1% of the company. Robert Rosen is a Director of ACRE.
  • Paul Joubert purchased 20,000 shares on June 20 pursuant to a public offering. Paul Joubert currently holds 27,027 shares or 0.1% of the company. Paul Joubert is a Director of ACRE and serves as Chairman of the Audit Committee.
  • Bruce Cohen purchased 25,000 shares on June 20 pursuant to a public offering. Bruce Cohen currently controls 40,000 shares or 0.1% of the company. Bruce Cohen is the President and Chief Operating Officer of ACRE, and also serves as a member of the manager's Investment Committee.

Insider buying by calendar month

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

MonthInsider buying / sharesInsider selling / shares
June 2013276,3330
May 201300
April 201300
March 201300
February 201300
January 2013130

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

Financials

The company reported the first-quarter financial results on May 15 with the following highlights:

Net income$0.3 million
Cash$22.6 million
Debt$269.7 million

On June 21 Ares Commercial Real Estate Corporation announced that it had priced a public offering of 18,000,000 shares of its common stock at a public offering price of $13.50 per share, raising gross proceeds of approximately $243,000,000.

Competition

ACRE's competitors include iStar Financial (SFI) and NorthStar Realty Finance Corp. (NRF). Here is a table comparing these companies.

CompanyACRESFINRFIndustry Average (REIT - Diversified)
Market Cap:117.17M880.30M1.67B3.65B
Employees:N/A170124250.00
Qtrly Rev Growth (yoy):4.53N/A0.330.00
Revenue:9.39M-21.84M412.72M560.72M
Gross Margin:0.76N/A0.810.90
EBITDA:N/AN/AN/A360.42M
Operating Margin:0.1415.830.470.51
Net Income:629.00K-284.22M-220.35MN/A
EPS:0.07-3.09-1.592.19
P/E:174.11N/AN/A3.69
PEG (5 yr expected):5.19N/AN/AN/A
P/S:12.48N/A4.056.50

ACRE's P/S ratio is above the industry average.

My analysis

There have been seven different insiders buying the shares and there have not been any insiders selling the shares during the past 30 days. There are four analyst buy ratings, one neutral rating and zero sell ratings with an average target price of $17.13. The company has a book value of $15.08 per share and the stock has a dividend yield of 7.60%. I believe the stock could be a good pick below the book value.

2. SL Green Realty Corp. (SLG) is a real estate investment trust [REIT]. The firm engages in the property management, acquisitions, financing, development, construction, and leasing.

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Insider buying by insider (last 30 days)

  • Andrew Levine purchased 5,000 shares of 6.50% Series I Cumulative Redeemable Preferred Stock on June 24. Andrew Levine is General Counsel, Executive Vice President and Corporate Secretary for SL Green, Andrew Levine is the company's Chief Legal Officer.
  • Marc Holliday purchased 10,000 shares of 6.50% Series I Cumulative Redeemable Preferred Stock on June 24. Marc Holliday has served as Chief Executive Officer of SL Green Realty Corp., and as a member of the company's Board of Directors since January 2004.
  • James Mead purchased 2,000 shares of 6.50% Series I Cumulative Redeemable Preferred Stock on June 20-24. James Mead is Chief Financial Officer of the company.

Insider buying by calendar month

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

MonthInsider buying / sharesInsider selling / shares
June 201317,0000
May 201306,000
April 201306,000
March 201306,000
February 201307,137
January 201300

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

Financials

The company reported the first-quarter financial results on April 23 with the following highlights:

Revenue$370.0 million
Funds from operations [FFO]$1.16 per share
Net income$18.9 million
Cash$243.1 million
Debt$6.7 billion

Competition

SL Green's competitors include Boston Properties (BXP) and Brookfield Office Properties (BPO). Here is a table comparing these companies.

CompanySLGBXPBPO
Market Cap:7.94B15.77B8.39B
Employees:1,0927301,899
Qtrly Rev Growth (yoy):0.110.080.05
Revenue:1.51B1.96B2.42B
Gross Margin:0.640.640.64
EBITDA:876.88M1.16B1.42B
Operating Margin:0.360.350.58
Net Income:139.28M240.61M1.13B
EPS:1.651.902.11
P/E:52.6754.787.88
PEG (5 yr expected):5.062.952.73
P/S:5.238.043.47

SL Green's P/S ratio is the second highest among these three companies.

My analysis

There have been three different insiders buying the shares and there have not been any insiders selling the shares during the past 30 days. The company has an insider ownership of 0.70%. There are seven analyst buy ratings, 10 neutral ratings and zero sell ratings with an average target price of $92.00. The company has a book value of $65.81 per share and the stock has a dividend yield of 1.52%. I believe the stock could be a good pick at the book value.

Source: 2 REITs With Recent Intensive Insider Buying