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When insiders accumulate a stock intensively, the stock can be expected to outperform the market during the next six months. Insiders tend to buy more often than usual before large price increases and to sell more than usual before price decreases.

In this article, I will feature one company 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%.

STAG Industrial (NYSE:STAG) is a self-administered and self-managed full-service real estate company focused on the acquisition, ownership and management of single tenant industrial properties throughout the United States.


(Click to enlarge)

Insider buying by insider (last 30 days)

  • Francis Jacoby purchased 1,000 preferred shares on August 22 and currently controls 1,000 preferred shares or less than 0.1% of the company. Francis Jacoby serves as a director of the company.
  • Benjamin Butcher purchased 1,000 shares on August 16 and 1,000 preferred shares on August 9. Benjamin Butcher currently holds 95,242 shares and 2,000 preferred shares or 0.2% of the company. Benjamin Butcher serves as Chief Executive Officer, President and Chairman of the Board of Directors.
  • Jeffrey Furber purchased 5,000 shares on August 15 and currently holds 30,228 shares or less than 0.1% of the company. Jeffrey Furber serves as a director of the company.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
August 2013 8,000 0
July 2013 2,602 0
June 2013 4,450 0
May 2013 200 0
April 2013 3,118 0
March 2013 0 0
February 2013 0 0
January 2013 0 0

There have been 18,370 shares purchased and there have been zero shares sold by the insiders this year.

Financials

STAG reported the second-quarter financial results on August 5 with the following highlights:

Revenue $32.1 million
Cash Net Operating Income $27.1 million
Core Funds From Operations $16.0 million
Adjusted Funds From Operations $15.1 million
Net loss $2.4 million
Cash $19.8 million
Debt $452.9 million

Competition

STAG Industrial's competitors include First Industrial Realty Trust (NYSE:FR) and Monmouth Real Estate Investment Corp. (NYSE:MNR). Here is a table comparing these companies.

Company STAG FR MNR
Market Cap: 853.53M 1.68B 396.92M
Employees: 36 173 11
Qtrly Rev Growth (yoy): 0.66 0.04 0.12
Revenue: 111.02M 334.97M 53.33M
Gross Margin: 0.80 0.67 0.83
EBITDA: 45.83M 207.51M 38.79M
Operating Margin: 0.12 0.25 0.46
Net Income: -10.00M -21.00M 11.44M
EPS: -0.35 -0.04 0.28
P/E: N/A N/A 32.30
PEG (5 yr expected): 2.30 15.51 N/A
P/S: 7.62 4.99 7.32

STAG Industrial has the highest P/S ratio among these three companies. First Industrial Realty Trust has seen two insider buy transactions and one insider sell transaction this year. Monmouth Real Estate Investment Corp. has seen 11 insider buy transactions and one insider sell transaction this year.

Conclusion

There have been three different insiders buying STAG and there have not been any insiders selling STAG during the last 30 days. Two out of these three insiders increased their holdings by more than 10%. STAG has an insider ownership of 0.40%. There are five analyst buy ratings, five neutral ratings and zero sell ratings with an average target price of $23.06. STAG has a book value of $10.49 per share and the stock has a dividend yield of 5.95%. I have a cautiously bullish bias for the stock currently based on the 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.

Source: Insiders Are Buying STAG Industrial