By The Sizemore Letter<\/u><\/p>\n
As their share prices have gotten pummeled over the Bernanke \u201ctaper scare,\u201d I\u2019ve become increasingly bullish on REITs.\u00a0 As I\u2019ve written in recent weeks, I believe this is an excellent time to accumulate shares of high-quality \u201cbuy and forget\u201d triple-net equity REITs<\/a>.\u00a0 But I also think it\u2019s an excellent time to take a position in their more speculative cousins, mortgage REITs<\/a>.<\/p>\n I\u2019m not alone on this view.\u00a0 The company insiders would appear to agree.<\/p>\n A company\u2019s management and directors can sell their company\u2019s stock for any number of reasons.\u00a0 Perhaps they executed stock options or want to diversify their portfolio\u2026or maybe their kids\u2019 college tuition bill came due.\u00a0 Unless the selling is widespread among several insiders, it\u2019s hard to draw firm conclusions about insider selling.<\/p>\n Insider buying<\/i> is a very different story, however.\u00a0 There is only one reason why a company insider would buy their own stock on the open market: they consider it a good investment.<\/p>\n Trading on material non-public information is illegal, of course.\u00a0 But there is nothing illegal about a company director using their knowledge of the business and their feelings about its prospects to make an informed purchase.\u00a0 And by following their SEC filings, we can do the same.<\/p>\n I\u2019ll start with American Realty Capital Properties (<\/span>ARCP<\/a>)<\/span>,<\/b> a triple-net retail REIT I hold in my Dividend Growth Portfolio<\/a><\/strong>.\u00a0 In the month of August alone, six company officers bought nearly $3 million in stock<\/a> between them.\u00a0 Their average price?\u00a0 $13.73.\u00a0 At today\u2019s prices, you can pick of ARCP\u2019s shares for less than what the insiders paid and enjoy a solid 6.7% dividend yield.<\/p>\n Let\u2019s also take a look at the recent insider trading activity<\/a> at Annaly Capital (<\/span>NLY<\/a>)<\/span><\/b>, the largest and most popular mortgage REIT. Chairman and CEO Wellington Denahan-Norris spent $2 million of her own money buying shares in August.\u00a0 Three other company officers made significant purchases in the month of August as well.<\/p>\n The usual caveats apply here.\u00a0 You should always do your own research and you should never blindly follow another investor\u2014even a company insider.\u00a0 But watching the trading moves of company insiders can provide useful insight when you\u2019re contemplating a contrarian value trade.<\/p>\n Disclosures: Sizemore Capital is long ARCP. This article first appeared on TraderPlanet<\/a>.<\/p>\n Charles Lewis Sizemore, CFA, is the editor of the\u00a0Sizemore Investment Letter<\/a>\u00a0and the chief investment officer of investments firm Sizemore Capital Management. As of this writing, he was long ARCP.\u00a0Click here<\/a>\u00a0to learn about his top 5 global investing trends and get your copy of \u201cThe Top 5 Million Dollar Trends of 2013.\u201d<\/em><\/p>\n This article first appeared on Sizemore Insights as Two REITs with Insider Buying<\/a><\/p>\n