Altisource Residential: 3 Different Insiders Have Purchased Shares This Month

In this article, I will feature one REIT 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%.

Altisource Residential Corporation (RESI) focuses on acquiring, owning, and managing single-family rental properties in the United States.

(click to enlarge)

Insider buying during the last 30 days

Here is a table of Altisource Residential's insider-trading activity during the last 30 days.

Name	Title	Trade Date	Shares Purchased	Current Ownership	Increase In Shares
Salah Saabneh	EVP	Feb 25	2,500	7,200 shares	+53.2%
Kenneth Najour	CFO	Feb 24	2,000	12,000 shares	+20.0%
Ashish Pandey	CEO	Feb 24	10,000	30,011 shares	+50.0%

There have been 14,500 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Altisource Residential's insider-trading activity by calendar month.

Month	Insider buying / shares	Insider selling / shares
February 2014	14,500	0
January 2014	0	0
December 2013	0	0
November 2013	0	0
October 2013	0	0
September 2013	0	0
August 2013	0	0
July 2013	0	0
June 2013	0	0
May 2013	26,500	0
April 2013	0	0
March 2013	0	0
February 2013	0	0
January 2013	0	0

There have been 41,000 shares purchased, and there have been zero shares sold by insiders since January 2013.

Financials

Altisource Residential reported the full-year 2013 financial results on February 20 with the following highlights:

Revenue	$71.6 million
Net income	$39.6 million
Cash	$116.0 million
Debt	$602.4 million

(click to enlarge)

(Source: Earnings presentation)

Competition

Altisource Residential's competitors include American Residential Properties (ARPI), and Silver Bay Realty Trust Corp. (SBY). Here is a table comparing these companies.

Company	RESI	ARPI	SBY
Market Cap:	1.64B	587.42M	613.54M
Employees:	N/A	45	N/A
Qtrly Rev Growth (yoy):	N/A	15.70	18.42
Revenue:	71.61M	28.09M	35.67M
Gross Margin:	N/A	0.46	0.02
EBITDA:	43.48M	-290.00K	-5.32M
Operating Margin:	0.61	-0.58	-0.59
Net Income:	39.60M	-21.24M	-18.69M
EPS:	1.61	-0.96	-0.48
P/E:	17.92	N/A	N/A
PEG (5 yr expected):	0.50	-1.04	N/A
P/S:	22.90	20.93	17.17

Only Altisource Residential is profitable among these three companies.

Here is a table of these competitors' insider-trading activities during the last 12 months.

Company	Insider buying / shares	Insider selling / shares
ARPI	16,000	0
SBY	210,551	0

Only Altisource Residential has seen intensive insider buying during the last 30 days.

Conclusion

There have been three different insiders buying Altisource Residential, and there have not been any insiders selling Altisource Residential during the last 30 days. All three of these insiders increased their holdings by more than 10%. Altisource Residential has an insider ownership of 28.72%.

Altisource Residential has a pro forma NAV per share of $28.30. I believe Altisource Residential could be a good pick below $28.30 based on the intensive insider buying.

(click to enlarge)

(Source: Earnings presentation)

Source: Altisource Residential: 3 Different Insiders Have Purchased Shares This Month

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in RESI over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

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