Bargain Hunters Take Note: Insider Cluster-Buying At RSO

A particularly strong insider buying signal is what we call a "cluster-buy" where three or more different insiders make open market purchases within a short period of one another. At Resource Capital Corp (RSO), 3 different insiders purchased 53,658 shares at an average price of $5.41/share, for a total of $290,156, with the most recent purchase on May 19, 2014.

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Presumably the only reason an insider would take their hard-earned cash and use it to buy stock of their company in the open market, is that they expect to make money. So when multiple insiders all decide to make purchases around the same time, it could be a strong indication that the stock is undervalued. Below is a table summarizing the insider buys that make up this "cluster":

Purchased Insider Title Shares Price/Share Value
05/19/2014 Jonathan Z. Cohen CEO & President 40,000 $5.41 $216,316.00
05/19/2014 Steven J. Kessler Director 9,158 $5.41 $49,540.20
05/19/2014 Murray S. Levin Director 4,500 $5.40 $24,299.55

The chart below shows the one year performance of RSO shares, versus its 200 day moving average. Note that RSO's low point in its 52 week range is $5.31 per share, with $6.69 as the 52 week high point — that compares with a last trade of $5.62, with shares currently trading up about 1.8% on the day.

Resource Capital Corp Chart

The current annualized dividend paid by Resource Capital Corp is $0.80/share, currently paid in quarterly installments, and its most recent dividend ex-date was on 03/27/2014. Below is a long-term dividend history chart for RSO, which can be of good help in judging whether the most recent dividend with approx. 14.5% annualized yield is likely to continue.

RSO+Dividend+History+Chart

According to the ETF Finder at ETF Channel, RSO makes up 1.81% of the SuperDividend U.S. ETF ( DIV) which is trading up by about 0.2% on the day Thursday.

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