Join        Login             Stock Quote

Has Your Mutual Fund Outperformed These Newcastle Investment Corp. (NCT) Insiders?

 February 21, 2013 10:13 AM

(By Rich Bieglmeier) Monitoring the purchases of stock by insiders is a good way for investors to find companies they might not have heard about otherwise. Many times, Executives tip their hands on how they feel about their company's fortunes. iStock pay closer attention to buys than sells because CEOs, CFOs, directors… need money to buy those mansions and yachts.

But, we think nobody lies with their wallet, and that most insiders buy the stock they are most knowledgeable and intimate with for one reason – to make money. The same reason you buy stocks.

Typically, we look for cluster buys where multiple members of the executive staff buy the stock simultaneously, or large buys that close in on seven figures. Would you throw a million dollars away if you knew your company was headed for a hand-basket trip?

[Related -Futures Point To Higher Open; Ulta Salon, Cosmetics & Fragrance, Inc. (ULTA) Rises]

Once we have identified a stock of interest, iStock examines the track record of the insider(s). Like any other stock picker, money-manager, handicapper… we want to make sure they have a history of getting it right.

So, when we saw two insiders, each buying more than $1 million of Newcastle Investment Corp. (NCT), we got a little excited. On February 15th, Director, Wesley Edens and Secretary, Randal Nardone each purchased 95,500 shares at $10.48 for $1,000,840 each. Two buys are better than one!

Now, remember, we said our second criterion is track record. In January 2013, the same duo bought nearly $1 million each at $9.35 a share. In July 2012, the pair picked up more than $3 million ($2:1 Edens:Nardone) at $6.70 per share. And, way back in September 2011, our dynamic duo splurged on $4.5 million ($3.5:1 Edens:Nardone) of NCT at $4.55 per share. By now, you'd expect to see some profit taking, no?

[Related -9 Dividend Stocks Providing A Growing Income]

In addition to substantial capital gains, Newcastle pays shareholders a fat dividend of 88 cents a year or 7.9%. Not only have Edens and Nardone outperformed most, if not all, money-managers, the dividend crushes bank CD rates. (Of course, your money is safer in a Too Big to Fail Bank CD ;)

Newcastle operates as a real estate investment and finance company that invests in real estate securities including commercial mortgage backed securities, senior unsecured debt issued by property REITs, real estate related asset backed securities, and agency residential mortgage backed securities.

Overall: Edens' and Nardone's track records plus the attractive dividend makes Newcastle Investment Corp. (NCT) an intriguing candidate for investors seeking a total return REIT.


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageOversold Airline Ready For A Quick Rebound

Trading countertrend moves can be profitable but risky, so it pays to line up as many factors as possible read on...

article imageWhat Is Your Sell Criteria?

Every stock market cycle has its darlings—the stocks investors believe can do no wrong.  I remember 1999 read on...

article imageUS Employment Growth Continued To Slow In April

Company payrolls increased by a lower-than-expected 171,000 last month, the US Labor Department reports–the read on...

article imageMake America Great Again

Our weekly commentaries provide Euro Pacific Capital's latest thinking on developments in the global read on...

Popular Articles

Daily Sector Scan
Partner Center

Related Articles:

7 Hot Financial Stocks With Yields Up To 19%
More Articles on: Finance

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.