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The Vanguard REIT Index ETF (NYSEARCA:VNQ) was trading as low as $19.95 in March 2009. The index is currently trading at $71.23 or 257.0% 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. Physicians Realty Trust (NYSE:DOC), a self-managed healthcare real estate company, focuses on the acquisition, development, ownership, and management of healthcare properties that are leased to physicians, hospitals, and healthcare delivery systems.


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Insider buying by insider (last 30 days)

  • John Thomas purchased 9,780 shares on July 24 pursuant to the initial public offering. John Thomas currently holds 95,651 shares or 0.9% of the company. John Thomas is Chief Executive Officer, Trustee.
  • Tommy Thompson purchased 13,047 shares on July 24 pursuant to the initial public offering. Tommy Thompson currently holds 21,743 shares or 0.2% of the company. Tommy Thompson serves as a director of the company.
  • John Lucey purchased 1,000 shares on July 24 pursuant to the initial public offering. John Lucey currently holds 7,522 shares or less than 0.1% of the company. John Lucey is SVP, Principal Accounting and Reporting Officer.
  • William Ebinger purchased 869 shares on July 24 pursuant to the initial public offering. William Ebinger currently holds 9,565 shares or less than 0.1% of the company. William Ebinger serves as a director of the company.
  • Albert Black purchased 8,694 shares on July 24 pursuant to the initial public offering. Albert Black currently holds 13,043 shares or 0.1% of the company. Albert Black serves as a director of the company.
  • Stanton Anderson purchased 8,695 shares on July 24 pursuant to the initial public offering. Stanton Anderson currently holds 17,391 shares or 0.2% of the company. Stanton Anderson serves as a director of the company.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
July 2013 42,085 0
June 2013 0 0
May 2013 0 0
April 2013 0 0
March 2013 0 0

The company had its IPO in July.

Financials

The company reported the pro forma first-quarter financial results with the following highlights:

Revenue $3.3 million
Net loss $0.3 million
Cash $73.8 million
Debt $47.1 million
Net tangible book value $9.28 per share

Competition

Physicians Realty Trust expects to compete with many other entities engaged in real estate investment activities for acquisitions of healthcare properties, including national, regional and local operators, acquirers and developers of healthcare-related real estate properties. These companies include HCP, Inc. (NYSE:HCP), Ventas (NYSE:VTR) and Health Care REIT (NYSE:HCN).

My analysis

There have been six different insiders buying the shares and there have not been any insiders selling the shares since the IPO. The company has an insider ownership of 2.3%. The net tangible book value is $9.28 per share, which could be a good entry point for the stock.

2. HealthLease Properties Real Estate Investment Trust (OTC:HREIF) is an open-ended real estate investment.


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Insider buying by insider (last 30 days)

  • Vincent Grogg purchased 10,000 shares on July 23 pursuant to a public offering. Vincent Grogg currently holds 10,000 shares or less than 0.1% of the company. Vincent Grogg is an insider of the company.
  • Mainstreet Asset Management Inc. purchased 455,481 shares on July 1 and currently controls 2,846,481 shares or 19.6% of HealthLease Properties.
  • Clint Mitchell purchased 1,000 shares on July 23 pursuant to a public offering. Clint Mitchell currently holds 1,000 shares or less than 0.1% of the company. Clint Mitchell is an insider of the company.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
July 2013 466,481 0
June 2013 0 0
May 2013 0 0
April 2013 61,800 0
March 2013 0 0

There have been 528,281 shares purchased and there have been zero shares sold by the insiders since March 1.

Financials

The company reported the first-quarter financial results on May 8 with the following highlights:

Revenue $5.4 million
Net income $3.8 million
Cash $3.1 million
Debt $141.3 million

On July 23 HealthLease Properties closed its previously announced public offering of 6,587,500 trust units at a price of $10.45 per unit for total gross proceeds of $68,839,375.

Outlook

The management believes that certain characteristics of the North American senior housing and care industry, including favorable demographic trends, increasing demand combined with stagnant supply of new facilities and the shift of post-acute care patients from traditional hospitals to skilled nursing and long-term care facilities due to budgetary constraints, provide a sizeable number of opportunities to expand the REIT's portfolio of properties. The management also believes that the REIT is well-positioned to participate in the industry and capitalize on its projected growth without being directly exposed to the day-to-day operations of the senior housing and care industry primarily as a result of the REIT's high quality of properties, its triple-net leasing structure, the asset manager's relationship with reputable operators and the REIT's pre-leased development model.

Competition

The real estate business is competitive. Numerous other developers, managers and owners of seniors housing and care properties will compete with HealthLease Properties in seeking operators. Some of the properties located in the same markets as HealthLease's properties are newer, better located, less levered or have stronger tenant profiles than HealthLease's properties.

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 stock is trading at a P/E ratio of 17.15 and the stock has a dividend yield of 8.1%. The company has a book value of $8.98 per share, which could be a good entry point for the stock.

Source: 2 Healthcare REITs With Recent Intensive Insider Buying