Insiders Are Buying Gladstone Commercial

| About: Gladstone Commercial (GOOD)

The Vanguard REIT Index ETF (NYSEARCA:VNQ) was trading as low as $19.95 in March 2009. The index is currently trading at $65.07 or 226.2% above the low made in March 2009.

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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:

  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%.

Gladstone Commercial Corporation (NASDAQ:GOOD) operates as a real estate investment trust (REIT) in the United States. It engages in investing in and owning net leased industrial and commercial real properties, and making long-term industrial and commercial mortgage loans.

Gladstone bottomed at $5.36 in February 2009 and is currently trading at $17.89 or 233.8% above the low made in February 2009. Gladstone's share performance since February 2009 is in line with the Vanguard REIT Index's share performance.

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Insider buying by insider (last 30 days)

  • John Reilly purchased 7,681 preferred shares on August 7-16 and currently holds 19,581 preferred shares or 0.2% of the company. John Reilly serves as a director of the company.
  • Michael Licalsi purchased 1,000 shares on August 16 and currently holds 2,304 shares or less than 0.1% of the company. Michael Licalsi has been the company's Internal Counsel since October 2009.
  • Robert Cutlip purchased 2,000 shares on August 2-13 and currently holds 7,500 shares or less than 0.1% of the company. Robert Cutlip serves as President and Senior Managing Director of Gladstone Commercial.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
August 2013 10,681 0
July 2013 0 0
June 2013 0 0
May 2013 1,500 0
April 2013 0 0
March 2013 2,800 0
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There have been 14,981 shares purchased and there have been zero shares sold by the insiders since March 2013.

Financials

The company reported the second-quarter financial results on July 30 with the following highlights:

Revenue $14.3 million
Funds from operations $4.6 million
Net loss $0.6 million
Net debt $404.9 million
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Competition

Gladstone's competitors include Monmouth Real Estate Investment Corp. (NYSE:MNR) and PS Business Parks (NYSE:PSB). Here is a table comparing these three companies.

Company GOOD MNR PSB
Market Cap: 254.00M 394.55M 1.79B
Employees: N/A 11 161
Qtrly Rev Growth (yoy): 0.15 0.06 0.03
Revenue: 55.06M 51.82M 352.93M
Gross Margin: 0.91 0.83 0.67
EBITDA: 45.96M 37.94M 228.24M
Operating Margin: 0.50 0.46 0.34
Net Income: -1.80M 10.32M 31.16M
EPS: -0.16 0.26 1.32
P/E: N/A 34.90 55.44
PEG (5 yr expected): N/A N/A 2.50
P/S: 4.45 7.23 4.97
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Gladstone has the lowest P/S ratio among these three companies. Monmouth Real Estate Investment Corp. has seen two insider buy transactions this month and PS Business Parks has seen three insider buy transactions this month.

Conclusion

There have been three different insiders buying Gladstone and there have not been any insiders selling Gladstone during the last 30 days. All three of these insiders increased their holdings by more than 10%. There is one analyst buy rating, one neutral rating and zero sell ratings with an average target price of $20.50. Gladstone has a book value of $13.44 per share and the stock has a dividend yield of 8.68%. 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, and no plans to initiate any positions within 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.