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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.

(click to enlarge)

Insider buying during the last 30 days

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

NameTitleTrade DateShares PurchasedPublic OfferingCurrent OwnershipIncrease In Shares
Gary DundasDirectorNov 156,250Yes35,510 shares+21.4%
Adel ElAssalCIONov 151,250Yes8,393 shares+17.5%
Amanda GallacherVPNov 151,000Yes5,207 shares+23.8%
Brenda HughesCFONov 156,250Yes7,771 shares+410.9%
R. Bradley HurtubiseDirectorNov 156,250Yes76,708 shares+8.9%
Angela KingVPNov 151,000Yes5,839 shares+20.7%
Darryl MatthewsVPNov 151,000Yes5,626 shares+21.6%
Todd SchneiderCOONov 152,000Yes17,817 shares+12.6%
Jeffrey SmithCEONov 1546,875Yes1,992,465 shares+2.4%

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.

MonthInsider buying / sharesInsider selling / shares
November 201371,8750
October 201300
September 201300
August 20130100
July 201300
June 201304,072

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

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.

CompanyDCTFFCATMEEFT
Market Cap:284.90M1.91B2.29B
Employees:N/A7403,900
Qtrly Rev Growth (yoy):-0.120.150.14
Revenue:245.72M832.90M1.39B
Gross Margin:N/A0.320.37
EBITDA:70.08M192.24M174.71M
Operating Margin:0.070.120.08
Net Income:3.22M26.74M64.98M
EPS:0.190.601.26
P/E:88.6770.7736.13
PEG (5 yr expected):N/A1.461.60
P/S:1.122.261.61

DirectCash has the lowest P/S ratio among these three companies.

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

CompanyInsider buying / sharesInsider selling / shares
CATM0283,313
EEFT0592,107

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.

Source: Insiders Are Buying DirectCash Payments