Insiders Are Buying DirectCash Payments

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 |  About: DirectCash Payments, Inc. (DCTFF), Includes: CATM, EEFT
by: Markus Aarnio

In this article, I will feature one services sector stock 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 increased their holdings by more than 10%.

DirectCash Payments (OTC:DCTFF) provides automated teller machines (ATMs), debit terminals, prepaid phone cards, and prepaid cash cards in Canada, the United States, Mexico, and internationally.

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Insider buying during the last 30 days

Here is a table of DirectCash Payments' insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Purchased Public Offering Current Ownership Increase In Shares
Gary Dundas Director Nov 15 6,250 Yes 35,510 shares +21.4%
Adel ElAssal CIO Nov 15 1,250 Yes 8,393 shares +17.5%
Amanda Gallacher VP Nov 15 1,000 Yes 5,207 shares +23.8%
Brenda Hughes CFO Nov 15 6,250 Yes 7,771 shares +410.9%
R. Bradley Hurtubise Director Nov 15 6,250 Yes 76,708 shares +8.9%
Angela King VP Nov 15 1,000 Yes 5,839 shares +20.7%
Darryl Matthews VP Nov 15 1,000 Yes 5,626 shares +21.6%
Todd Schneider COO Nov 15 2,000 Yes 17,817 shares +12.6%
Jeffrey Smith CEO Nov 15 46,875 Yes 1,992,465 shares +2.4%
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There have been 71,875 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of DirectCash Payments' insider-trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
November 2013 71,875 0
October 2013 0 0
September 2013 0 0
August 2013 0 100
July 2013 0 0
June 2013 0 4,072
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There have been 71,875 shares purchased and there have been 4,172 shares sold by insiders since June 2013. The month of November has seen all of the insider buying.

Financials

DirectCash reported the third-quarter financial results on November 14 with the following highlights:

Revenue $58.7 million
Funds from operations $10.7 million
Net loss $0.2 million
Cash $23.6 million
Debt $203.9 million
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On November 15, DirectCash closed its previously announced public offering of 950,000 common shares at a price of $16.00 per share for aggregate gross proceeds of $15,200,000.

Outlook

DirectCash's focus for the remainder of 2013 will be to continue to integrate its new businesses and international divisions, driving operating efficiencies as well as to continue to grow the business in a reasonable and sustainable manner.

Competition

DirectCash's competitors include Cardtronics (NASDAQ:CATM) and Euronet Worldwide (NASDAQ:EEFT).

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(Source: Investor presentation)

Here is a table comparing these three companies.

Company DCTFF CATM EEFT
Market Cap: 284.90M 1.91B 2.29B
Employees: N/A 740 3,900
Qtrly Rev Growth (yoy): -0.12 0.15 0.14
Revenue: 245.72M 832.90M 1.39B
Gross Margin: N/A 0.32 0.37
EBITDA: 70.08M 192.24M 174.71M
Operating Margin: 0.07 0.12 0.08
Net Income: 3.22M 26.74M 64.98M
EPS: 0.19 0.60 1.26
P/E: 88.67 70.77 36.13
PEG (5 yr expected): N/A 1.46 1.60
P/S: 1.12 2.26 1.61
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DirectCash has the lowest P/S ratio among these three companies.

Here is a table of these competitors' insider-trading activities this year.

Company Insider buying / shares Insider selling / shares
CATM 0 283,313
EEFT 0 592,107
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Only DirectCash has seen intensive insider buying during the last 30 days.

Conclusion

There have been nine different insiders buying DirectCash and there have not been any insiders selling DirectCash during the last 30 days. Seven of these nine insiders increased their holdings by more than 10%.

DirectCash is trading at a P/E ratio of 88.67 and the stock has a dividend yield of 7.8%. I believe the stock could be a good pick at $16 based on the intensive insider buying.

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