The Vanguard REIT Index ETF (NYSEARCA:VNQ) was trading as low as $19.95 in March 2009. The index is currently trading at $68.89 or 245.3% above the low made in March 2009.
In this article, I will feature one REIT that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:
The stock is purchased by three or more insiders within one month.
The stock is sold by no insiders in the month of intensive purchasing.
- At least two purchasers increase their holdings by more than 10%.
American Realty Capital Properties (ARCP) owns and acquires single tenant, freestanding commercial real estate that is net leased on a medium-term basis, primarily to investment grade credit rated and other creditworthy tenants.
Insider buying by insider (last 30 days)
- William Kahane purchased 50,000 shares on August 9 and currently holds 375,554 shares or 0.2% of the company. William Kahane has served as a director of American Realty Capital Properties since February 2013.
- Edward Weil purchased 25,000 shares on August 9 and currently holds 106,707 shares or less than 0.1% of the company. Edward Weil serves as President of American Realty Capital Properties.
- Brian Block purchased 25,000 shares on August 9 and currently holds 90,049 shares or less than 0.1% of the company. Brian Block serves as Executive Vice President and Chief Financial Officer of American Realty Capital Properties.
- Nicholas Schorsch purchased 50,000 shares on August 9 and currently holds 1,284,811 shares or 0.8% of the company. Nicholas Schorsch serves as Chairman and Chief Executive Officer of American Realty Capital Properties.
- Peter Budko purchased 50,000 shares on August 9 and currently holds 364,754 shares or 0.2% of the company. Peter Budko serves as Executive Vice President and Chief Investment Officer of American Realty Capital Properties.
Insider buying by calendar month
Here is a table of American Realty Capital Properties' insider trading activity by calendar month.
|Month||Insider buying / shares||Insider selling / shares|
There have been 422,801 shares purchased and there have been 282,000 shares sold by the insiders this year.
The company reported the second-quarter financial results on August 6 with the following highlights:
|Core Funds From Operations [FFO]||$28.8 million|
|Net loss||$37.7 million|
The company's guidance for 2014 is as follows:
American Realty Capital Properties is subject to competition in the acquisition of properties and intense competition in the leasing of its properties. American Realty Capital Properties competes with a number of developers, owners and operators of retail, industrial and office real estate. American Realty Capital Properties may also face new competitors and, due to its focus on single tenant properties located throughout the United States, and because many of its competitors are locally or regionally focused, American Realty Capital Properties will not encounter the same competitors in each region of the United States.
Some of American Realty Capital Properties' competitors include Realty Income Corp. (NYSE:O), W. P. Carey & Co. LLC (NYSE:WPC) and National Retail Properties (NYSE:NNN). Here is a table comparing the tenant credit ratings.
American Realty Capital Properties' tenants have the highest credit ratings among these four companies.
There have been five different insiders buying the shares and there have not been any insiders selling the shares during the past 30 days. Four out of these five insiders increased their holdings by more than 10%. The company has an insider ownership of 1.40%. There are two analyst buy ratings, zero neutral ratings and zero sell ratings with an average price target of $17.50. The company has a book value of $6.79 per share and the stock has a dividend yield of 6.80%. I have a cautiously bullish bias for the stock currently based on the intensive insider buying.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ARCP 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.