Insider Trading a Constant at Monmouth

Insider trading: According to some analysts, “A manager’s effort to continue to buy his or her company’s shares, a behaviour seen in Monmouth, builds confidence for all vested parties.”

Raj Rajaratnam listening to tip

Kevin S. Miller purchased 59 shares of Monmouth R.E. Inv. Corp. (NYSE:MNR) common stock last week at a discounted price of $8.47 each. The Chief Financial Officer now holds 10,782 shares, amounting to approximately $96,822. The shares were acquired through the firm’s Dividend Reinvestment and Stock Purchase Plan, which has allowed Miller to accumulate stock on a monthly basis. Naturally such small transactions have little or no impact on shareholder value, and thus, Monmouth is unsurprisingly still trading very near its 52-week-low.

Despite the downward trend the stock has been experiencing over the past three months, what makes Monmouth interesting for shareholders is its 6.76% annual dividend yield. On October 1st the firm declared its quarterly cash dividend on Common Stock to be $0.15 per share. As dividends are due in December, several insiders have been increasing their stakes in the firm. Chairman Eugene W. Landy for example, acquired 800 shares back in August.

In addition to the attractive dividend yield, the firm is currently trading at only 18.5 times its earnings. Hence shares are available at a huge price discount relative to their industry’s average valuation. Revenue growth and net income levels, on the other hand, are high above the industrial REIT median.

Whether the small amounts of shares purchased by Miller recently will be enough to help the stock gain more momentum is still to be determined. Nevertheless, insiders are bound to continue investing in the firm on a regular basis.

Disclosure: Pablo Erbar holds no position in any stocks mentioned

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