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Insiders Are Buying Pure Industrial Real Estate Trust

September 11, 2013 | About:
Markus Aarnio

Markus Aarnio

1 followers
One real estate investment trust has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

  • The stock is purchased by three or more insiders within one month.
  • The stock is sold by no insiders in the month of intensive purchasing.
  • At least two purchasers increase their holdings by more than 10%.
Pure Industrial Real Estate Trust (AAR.UN) is an unincorporated, open-ended investment trust that acquires, owns and operates a diversified portfolio of income-producing industrial properties in primary markets across Canada.

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Insider Buying During the Last 30 Days


  • Darren Latoski purchased 4,500 shares on Aug. 27 and currently holds 14,077 shares or less than 0.1% of the company. Darren Latoski is Trustee and co-chief executive officer. Darren Latoski increased his holdings by 47.0% in August.
  • Douglas Scott purchased 1,600 shares on August 27 and currently controls 57,251 shares or less than 0.1% of the company. Douglas Scott serves as a director of the company. Douglas Scott increased his holdings by 2.9% in August.
  • Francis Tam purchased 45,000 shares on Sept. 3 and currently holds 51,800 shares or less than 0.1% of the company. Francis Tam is chief financial officer of the company. Francis Tam increased his holdings by 661.8% in August.
Insider Buying by Calendar Month

Here is a table of Pure Industrial Real Estate Trust's insider-trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
September 201345,0000
August 20136,1000
July 201300
June 201319,3000
May 20133,0000
April 201300
March 201314,0005,000


There have been 87,400 shares purchased and there have been 5,000 shares sold by insiders since March 2013.

Financials

Pure Industrial Real Estate Trust reported the second-quarter financial results on Aug. 12 with the following highlights:

Revenue$25.8 million
Funds from operations$21.5 million
Cash$9.8 million
Debt$720.5 million


Outlook


Pure Industrial Real Estate Trust has projected a $1.0 billion market cap by the end of 2014.

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Competition


Pure Industrial Real Estate Trust's competitors include Dundee Industrial REIT (DIR.UN), Summit Industrial Income REIT (SMU.UN) and WPT Industrial REIT (TSX:WIR.U). Dundee Industrial REIT has seen 23 insider buy transactions and one insider sell transaction during the past six months. Dundee Industrial REIT has a dividend yield of 8.4%. Summit Industrial Income REIT has seen 64 insider buy transactions during the past six months. Summit Industrial Income REIT has a dividend yield of 8.6%.

Peer analysis

Pure Industrial Real Estate Trust has outperformed the peer group since its IPO in September 2007.

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Conclusion


There have been three different insiders buying Pure Industrial Real Estate Trust and there have not been any insiders selling Pure Industrial Real Estate Trust during the last 30 days. Two out of these three insiders increased their holdings by more than 10%.

There are five analyst buy ratings, one neutral rating and zero sell ratings with an average target price of $5.75. Pure Industrial Real Estate Trust has a book value of $4.42 per share and the stock has a dividend yield of 7.5%. I believe the stock could be a good pick below the book value of $4.42 per share.

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Disclosure:
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

About the author:

Markus Aarnio
I have 15 years of investing experience. I have traded stocks, commodities and Forex markets.

Rating: 5.0/5 (2 votes)

Comments

achill
Achill - 11 months ago
The cashflow statement tells a much different story, which tells me I need more digging into the company in order to find out why the constantly raise cash on an increasing basis over the last 3 years.

If you look at the Cash from Operating Activities 40,431 from 2012 and subtract the Cash from Investing Activities (293,185) you'll get a sizable negative free cashflow which is offset only from financing activity by issuance of new L/T debt and additional stock.

Why the fund is doing this?

BTW, the debt/equity ratio is about 1.2 which is not good either.
maarnio
Maarnio - 10 months ago
Achill,

It is all very common with these REITs. The investor presentation has been updated:

http://www.piret.ca/sites/default/files/PIRET%20-%20Sept%2013%202013%20Slidedeck%20LR.pdf

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