Insiders Are Buying Franklin Street Properties

Sep.18.13 | About: Franklin Street (FSP)

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%.

Franklin Street Properties (NYSEMKT:FSP) provides real estate and investment banking/investment services in the United States. The company has elected to be taxed as a REIT.

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Insider buying during the last 30 days

  • Brian Hansen purchased 10,000 shares on September 12-13, and currently holds 24,440 shares or less than 0.1% of the company. Brian Hansen has been a director of the company since November 2012. Brian Hansen increased his holdings by 69.3% in September.
  • John Demeritt purchased 2,000 shares on August 19, and currently holds 24,000 shares or less than 0.1% of the company. John Demeritt is Executive Vice President, Chief Financial Officer of the company. John Demeritt increased his holdings by 9.1% in August.
  • Jeffrey Carter purchased 2,350 shares on August 19, and currently holds 9,775 shares or less than 0.1% of the company. Jeffrey Carter is Executive Vice President, Chief Investment Officer of the company. Jeffrey Carter increased his holdings by 31.6% in August.

Insider buying by calendar month

Here is a table of Franklin Street Properties' insider-trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
September 2013 10,000 0
August 2013 4,350 0
July 2013 0 0
June 2013 0 0
May 2013 13,250 0
April 2013 0 0
March 2013 5,000 0
February 2013 0 0
January 2013 0 0
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There have been 32,600 shares purchased and there have been zero shares sold by insiders this year.

Financials

Franklin Street Properties reported the second-quarter financial results on July 30, with the following highlights:

Revenue $48.0 million
Funds From Operations [FFO] $22.1 million
Net income $4.7 million
Cash $25.0 million
Debt $581.5 million
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Outlook

Franklin Street Properties expects continued growth, both organically in terms of same-store rents, along with additional property acquisition opportunities this year. Franklin Street Properties is optimistic about its profit performance potential for the second half of 2013 and beyond.

Competition

Franklin Street Properties' peer group consists of Brandywine Realty Trust (NYSE:BDN), CommonWealth REIT (Pending:CWH), Corporate Office Properties Trust (NYSE:OFC), Government Properties Income Trust (NYSE:GOV), Highwoods Properties (NYSE:HIW), Hudson Pacific Properties (NYSE:HPP), Kilroy Realty Corporation (NYSE:KRC), MPG Office Trust (NYSE:MPG-OLD), and Parkway Properties (NYSE:PKY).

Here is a table comparing Franklin Street Properties against the peer average.

FSP Peer average
Price/FFO 12.70 21.24
Dividend yield 6.10% 3.85%
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Franklin Street Properties has a higher dividend yield and a lower price/FFO ratio than the peer average.

Here is a table of these nine peer group companies' insider-trading activities this year.

Insider buying / shares Insider selling / shares
BDN 0 131,855
CWH 0 0
OFC 0 302,025
GOV 0 9,950,000
HIW 0 470,297
HPP 21,367 0
KRC 0 80,496
MPG 0 0
PKY 58,000 921
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Only Parkway Properties and Hudson Pacific Properties have seen insider buying out of these nine peer group companies this year.

Conclusion

There have been three different insiders buying Franklin Street Properties and there have not been any insiders selling Franklin Street Properties during the last 30 days. Two of these three insiders increased their holdings by more than 10%. Franklin Street Properties has an insider ownership of 1.00%.

There is one analyst buy rating, two neutral ratings and one sell rating with an average price target of $14.42. Franklin Street Properties has a book value of $11.77 per share and the stock has a dividend yield of 6.10%. Franklin Street Properties' dividend yield is above the peer average. I believe the stock could be a good pick at the book value of $11.77 per share.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in FSP 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.