This Stock Has A 9.52% Yield, Sells For Less Than Book, and Insiders Have Been Buying

In this series, we look through the most recent Dividend Channel ''DividendRank'' report, and then we cherry pick only those companies that have experienced insider buying within the past six months. The officers and directors of a company tend to have a unique insider's view of the business, and presumably the only reason an insider would choose to take their hard-earned cash and use it to buy stock in the open market, is that they expect to make money — maybe they find the stock very undervalued, or maybe they see exciting progress within the company, or maybe both. So when stocks turn up that see insider buying, and are also top ranked, investors are wise to take notice. One such company is Gladstone Investment Corp (GAIN), which saw buying by Chief Operating Officer Terry Lee Brubaker.

START SLIDESHOW:
The Top DividendRank'ed Stocks With Insider Buying »

Back on February 7, Brubaker invested $592,800.00 into 80,000 shares of GAIN, for a cost per share of $7.41. In trading on Wednesday, shares were changing hands as low as $7.71 per share, which is 4.0% above Brubaker's purchase price. Gladstone Investment Corp shares are currently trading +4.19% on the day. The chart below shows the one year performance of GAIN shares, versus its 200 day moving average:

Gladstone Investment Corp Chart

Looking at the chart above, GAIN's low point in its 52 week range is $6.80 per share, with $8.50 as the 52 week high point — that compares with a last trade of $7.88. By comparison, below is a table showing the prices at which insider buying was recorded over the last six months:

Purchased Insider Title Shares Price/Share Value
11/11/2013 David Hibbert Watson CFO and Treasurer 3,600 $7.35 $26,442.72
11/14/2013 David A. R. Dullum President 7,800 $7.33 $57,148.32
11/18/2013 David Gladstone Chief Executive Officer 20,000 $7.38 $147,598.00
11/26/2013 Terry Lee Brubaker Chief Operating Officer 13,900 $7.54 $104,805.21
11/27/2013 Terry Lee Brubaker Chief Operating Officer 3,000 $7.56 $22,680.00
12/10/2013 David Gladstone Chief Executive Officer 24,000 $7.55 $181,101.60
12/09/2013 Terry Lee Brubaker Chief Operating Officer 1,000 $7.51 $7,509.70
12/11/2013 Terry Lee Brubaker Chief Operating Officer 3,000 $7.55 $22,647.20
12/12/2013 Terry Lee Brubaker Chief Operating Officer 29,100 $7.59 $220,869.00
02/07/2014 Terry Lee Brubaker Chief Operating Officer 80,000 $7.41 $592,800.00

The DividendRank report noted that among the coverage universe, GAIN shares displayed both attractive valuation metrics and strong profitability metrics. For example, the recent GAIN share price of $7.57 represents a price-to-book ratio of 0.8 and an annual dividend yield of 9.52% — by comparison, the average company in Dividend Channel's coverage universe yields 4.1% and trades at a price-to-book ratio of 2.0. The report also cited the strong monthly dividend history at Gladstone Investment Corp, and favorable long-term multi-year growth rates in key fundamental data points.

The report stated, '' Dividend investors approaching investing from a value standpoint are generally most interested in researching the strongest most profitable companies, that also happen to be trading at an attractive valuation. That's what we aim to find using our proprietary DividendRank formula, which ranks the coverage universe based upon our various criteria for both profitability and valuation, to generate a list of the top most 'interesting' stocks, meant for investors as a source of ideas that merit further research.''

The annualized dividend paid by Gladstone Investment Corp is $0.72/share, currently paid in monthly installments, and its most recent dividend ex-date was on 02/14/2014. Below is a long-term dividend history chart for GAIN, which the report stressed as being of key importance. Indeed, studying a company's past dividend history can be of good help in judging whether the most recent dividend is likely to continue.

GAIN+Dividend+History+Chart

More from Stocks

One-on-One With Carnival Corporation CEO Arnold Donald (Watch)

One-on-One With Carnival Corporation CEO Arnold Donald (Watch)

Replay: Jim Cramer on the Markets, Tiffany, Micron Technology and Union Pacific

Replay: Jim Cramer on the Markets, Tiffany, Micron Technology and Union Pacific

Carnival CEO Arnold Donald: China Will Become the Largest Cruise Market

Carnival CEO Arnold Donald: China Will Become the Largest Cruise Market

Stocks Finish Higher After Release of Fed Minutes

Stocks Finish Higher After Release of Fed Minutes

Has Wall Street Completely Lost Its Mind on General Electric?

Has Wall Street Completely Lost Its Mind on General Electric?