Resource Capital: A 12.5% Better Bargain Than When Fore Bought

There's an old saying on Wall Street about insider buying: there are many possible reasons to sell a stock, but only one reason to buy. Back on June 11, Resource Capital Corp's Director, Richard Fore, invested $99,280.00 into 17,000 shares of RSO, for a cost per share of $5.84. Bargain hunters tend to pay particular attention to insider buys like this one, because 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.

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In trading on Friday, bargain hunters could buy shares of Resource Capital Corp ( RSO) and achieve a cost basis 12.5% cheaper than Fore, with shares changing hands as low as $5.11 per share. It should be noted that Fore has collected $0.40/share in dividends since the time of their purchase, so they are currently down 5.7% on their purchase from a total return basis. Resource Capital Corp shares are currently trading up about 0.6% on the day. The chart below shows the one year performance of RSO shares, versus its 200 day moving average:

Resource Capital Corp Chart

Looking at the chart above, RSO's low point in its 52 week range is $4.78 per share, with $6.15 as the 52 week high point — that compares with a last trade of $5.13. 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
06/06/2014 David E. Bloom Senior Vice President 8,500 $5.86 $49,810.00
06/11/2014 Richard Fore Director 17,000 $5.84 $99,280.00

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 09/26/2014. 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. 15.7% annualized yield is likely to continue.

RSO+Dividend+History+Chart

According to the ETF Finder at ETF Channel, RSO makes up 1.62% of the SuperDividend U.S. ETF ( DIV) which is trading up by about 0.6% on the day Friday.

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