First Bancorp (FBNC) Registers Cluster of Insider Buying and Two Other Companies with Soft Insider Activity

Expectedly, last week’s insider trading activity was relatively silent as compared to the previous week. But why was this light activity to be expected? Simply put, the United Kingdom’s decision to leave the European Union following an historic referendum held on Thursday. With mounting uncertainty in financial markets, investors, Board members and executives might have decided to stay on the sidelines for quite some time.

Last week’s dollar volume of insider buying increased by roughly 50% relative to the prior week, but almost four-fifths of last week’s volume of insider buying was related to a buying spree of Singapore-based investment company Shanda Group in LendingClub Corp (NYSE:LC). Ignoring the activity related to this large shareholder, last week’s insider buying fell meaningfully relative to the previous week. Similarly, last week’s volume of insider selling fell by roughly 60% week-over-week. With the second-quarter earnings season slowly approaching, insider trading activity may keep being inactive for quite some time. Insider Monkey processed the Form 4 filings revealing insider buying submitted with the SEC on Friday and identified three companies with relatively noteworthy insider buying.

At Insider Monkey, we track around 730 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).

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Regional Bank Registers Cluster of Insider Buying After Announcing $100 Million-Acquisition

First Bancorp (NASDAQ:FBNC) registered a cluster of insider buying last week, albeit the size of each insider purchase was not overly significant. In fact, the company had the most influential and informed executives buy shares last week. To begin with, President Michael Goodwin Mayer bought 500 shares on Friday for $17.94 each, lifting his overall holding to 11,498 shares. More importantly, Chief Executive Officer Richard H. Moore snatched up two blocks of 1,400 shares each on the same day at a weighted average cost of $17.78. After the recent purchases, Mr. Moore currently holds a direct ownership stake of 96,716 shares. Eric P. Credle, Chief Financial Officer since 1997, purchased 1,000 shares on Friday at $17.72 apiece, which lifted his overall holding to 22,094 shares.

The insider buying comes shortly after the holding company for First Bank announced it was acquiring the parent company of Carolina Bank, Carolina Bank Holding Inc. (NC) (NASDAQ:CLBH), in a cash-and-stock transaction valued at roughly $97.3 million. First Bancorp (NASDAQ:FBNC)’s shares are down 4% year-to-date, mainly owing to 9% drop in their value in the past month alone. Under the terms of the agreement, Carolina Bank shareholders are set to receive either 1.002 shares of First Bancorp shares or $20.00 in cash for each share of Carolina Bank. The acquisition is anticipated to complete in the final quarter of 2016 or first quarter of 2017. The acquiree currently operates eight baking locations, along with three mortgage loan offices.

There were seven hedge funds followed by Insider Monkey with equity investments in the bank at the end of the March quarter, which amassed 11% of its outstanding common stock. Matthew Lindenbaum’s Basswood Capital was the owner of 1.01 million shares of First Bancorp (NASDAQ:FBNC) on March 31.

Let’s head to the second page of this article, where we will discuss the insider buying registered at two other companies.

Parent Company of the Bank of South Carolina Registers Mild Insider Buying

Bank of SC Corporation (NASDAQ:BKSC) recently registered one of the most voluminous insider purchases of 2016. Executive Vice President Douglas H. Sass bought 1,100 shares on Thursday at a cost of $9.47 per share, increasing his direct ownership stake to 7,097 shares. Mr. Sass also holds an indirect ownership stake of 15,776 shares, which is held via an employee stock ownership plan (ESOP).

The shares of the South Carolina-based financial institution holding company are down nearly 1% since the beginning of 2016. The Bank of South Carolina is a state-chartered commercial bank operating mainly in the Charleston, Dorchester and Berkeley counties of South Carolina. Bank of SC Corporation (NASDAQ:BKSC) focuses its lending activities on small and middle market businesses, professionals and individuals in the aforementioned geographic markets. The bank’s net loans at the end of the March quarter were $249.9 million, up $10.7 million quarter-over-quarter. Reportedly, a sustained improvement in economic conditions in the company’s primary markets contributed to the increase in loan demand.

Just recently, the bank’s boardroom approved a quarterly cash dividend of $0.13 per share, which implies an annual dividend yield of 3.30%. Bank of SC shares are currently changing hands at a trailing PE ratio of 16.6, which is below the trailing P/E multiple of 24.2 for the S&P 500 Index. There were no hedge funds monitored by our team with stakes in Bank of SC Corporation (NASDAQ:BKSC) at the end of March.

Oil and Gas E&P Company Has Two Board Members Buy Some Shares

Energen Corporation (NYSE:EGN) saw two members of its boardroom buy some shares this past week. Director Magnus J. Gorrie snapped up 1,000 units of common stock on Friday for $47.26 each, boosting his ownership to 7,900 units. Alan A. Kleier, Board member since April 2015, purchased 500 shares two days earlier at $48.60 apiece. After the recent purchase, Mr. Kleier, who has almost four decades of experience in the oil and gas industry, currently owns a mere 1,000 Energen shares.

The oil and gas exploration and production company with operations in the Permian Basin in west Texas and the San Juan Basin in New Mexico has seen its market value gain 13% since the start of 2016. Energen Corporation (NYSE:EGN) derived 83% of its first-quarter revenue from oil, while the remainder from natural gas and natural gas liquids. The aforementioned insider buying comes after the company announced deals to sell non-core assets in the Delaware and San Juan Basins, which would yield total gross proceeds of $551.7 million. Meanwhile, analysts at Barclays increased their price target on Energen to $52 from $50 after the oil and gas E&P company sold non-core assets generating proceeds above the investment bank’s forecast of $400 million. “Considering the company’s balance sheet strength and its streamlined asset base, we think EGN is well positioned to add scale and efficiency through consolidation in the Permian Basin”, said Barclays analysts. Those asset sales are anticipated to close by mid-August.

The oil and gas E&P firm received some love from the asset managers followed by Insider Monkey during the first three months of 2016, as the number of managers with stakes in the company jumped to 29 from 18 quarter-on-quarter. Those 29 money managers amassed nearly 15% of the company’s total number of outstanding shares. Ken Griffin’s Citadel Advisors LLC owns 1.35 million shares of Energen Corporation (NYSE:EGN) as of March 31.

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