1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Charles Sizemore
Charles Sizemore
Articles (507)  | Author's Website |

The Insider Buying Continues in REITs

February 21, 2014 | About:

I’ve been broadly bullish on REITs ever since the “taper tantrum” of May of last year, noting the heavy insider buying in several REITs I follow.

Whenever you see a stock slide in value, there is always that nagging fear: “What does the market know that I don’t.” Often times the answer is “nothing,” and the selloff is due to macro factors not directly related to the company. That was certainly the case back in May; fears that Fed tapering would cause bond yields to rise caused the prices of “bond like” REITs to collapse.

One of the best indicators of whether a selloff is cause for concern is to see what company insiders are doing. You should not automatically follow what the insiders do, of course. Company management can be biased and as blind to outside macro risk as the next guy. But all else equal, I’d prefer to take the same side of the trade as the insiders. As imperfect as their knowledge is, it’s still going to be more comprehensive than yours. Remember, this is their day job.

So, what have the insiders been up to in STAG Industrial (NYSE:STAG), American Capital Realty Properties (ARCP) and Annaly (NYSE:NLY)?

In ARCP, insider buying has continued at a nice clip. Six different insiders have bought a combined 90,100 shares worth $1.2 million.

Likewise, the buying has continued in STAG. Eight different insiders have bought 7,044 shares worth $139,900 since December.

In Annaly, there have been no reported insider moves thus far in 2014, but four insiders bought 238,406 shares worth $2.5 million last November alone.

My advice? Continue to buy all three of these REITs on dips and reinvest your dividends. I see both equity and mortgage REITs as being ideal asset classes in 2014 as yields continue to ease off of their taper tantrum highs.

Disclosures: Long STAG and ARCP.

  • CEO Buys, CFO Buys: Stocks that are bought by their CEO/CFOs.
  • Insider Cluster Buys: Stocks that multiple company officers and directors have bought.
  • Double Buys:: Companies that both Gurus and Insiders are buying
  • Triple Buys: Companies that both Gurus and Insiders are buying, and Company is buying back.

» Take a Free Trial of Premium Membership

About the author:

Charles Sizemore
Charles Lewis Sizemore, CFA is the chief investment officer of Sizemore Capital Management. Please contact our offices today for a portfolio consultation.

Mr. Sizemore has been a repeat guest on Fox Business News, quoted in Barron’s Magazine and the Wall Street Journal, and published in many respected financial websites, including MarketWatch, TheStreet.com, InvestorPlace, MSN Money, Seeking Alpha, Stocks, Futures and Options Magazine, and The Daily Reckoning.

Visit Charles Sizemore's Website

Rating: 4.5/5 (2 votes)


Please leave your comment:

Performances of the stocks mentioned by Charles Sizemore

User Generated Screeners

avstudio1Nov 24-try 1
sonderek50 ROC
rael2222PUNTO G2
pbarker461 Dividend, ptbv, rsi
Doug Taylor<3 pe
nec5555Pat Dorsey Moat 5Y v1
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat