Tracking insider purchases is very important to our investment strategy (just as much as hedge fund moves). Therefore, in this article, I will look into two financial sector stocks that witnessed insider purchases over the past few days.
One of these companies is American Realty Capital Properties Inc (NASDAQ:ARCP), a self-managed and self-administered REIT with a market cap of more than $10.3 billion, which focuses mainly on commercial real estate.
Last Monday, April 21, Edward Weil Jr., Board Director, acquired 7,500 shares of Common Stock multiple trades at around $13.28 per share. He now owns 196,635 shares of Common Stock. In addition to these shares, Mr. Weil directly owns 5,086 shares of Series F Cumulative Redeemable Preferred Stock. A month ago, on March 28, the insider bought 10,000 shares of Common Stock for an average price of $13.80 per share.
Also about a month ago, surrounding the announcement of the company beginning to trade ex-dividend on March 28th (following changes in the CEO and CFO positions), several other insiders at American Realty Capital Properties acquired the stock, for prices around $13.78-$13.90 per share.
In addition to these purchases, bullishness can also be seen amongst hedge funds. Richard Mcguire’s Marcato Capital Management recently started a position in the stock with 8.8 million shares, which comprise approximately 5% of its equity portfolio. Michael Thompson and Michael Blitzer also started large positions in the company over the last reported quarter. Furthermore, Doug Silverman and Alexander Klabin’s Senator Investment Group more than doubled its stake in American Realty Capital Properties Inc (NASDAQ:ARCP), and now owns about 5.3 million shares.
All of this confidence cannot be understood if one only looks at the company’s fundamentals, which are quite weak. However, a 7% dividend yield certainly makes it an attractive investment. Moreover, several recent acquisitions, including that of Cole Real Estate Investments, Inc. (NYSE:COLE) and interests in six hotels, bode well for the REIT’s future. This might be the reason why analysts expect American Realty Capital Properties Inc (NASDAQ:ARCP) to deliver EPS growth above 30% this year.
The second case I would like to observe is that of National Penn Bancshares (NASDAQ:NPBC), a $1.45 billion market cap commercial and retail banking services company which saw one Board Director, Christian Martin, buy its shares in four separate occasions since the beginning of 2014. The latest acquisition took place on April 17, when Mr. Martin purchased 962 shares of Common Stock for $10.40 per share. After these transactions, the insider owns more than 481,500 shares of the company, through diverse direct and indirect holdings.
On top of Mr. Martin, several hedge funds seem to feel bullish about this stock. Lee Munder‘s Munder Capital Group started a new position lately, with 2.64 million shares; and several other prominent fund managers, including Richard S. Pzena, Ric Dillon, Ken Griffin and Jim Simons all increased their – millionaire – stakes in the company over the last reported quarter.
Disclosure: Javier Hasse holds no position in any stocks mentioned