Over the past few days, insiders have snapped up shares of UMH Properties, Inc. (UMH) and Revelation Biosciences, Inc. (REVB). While such occurrences are typically considered a feather in the cap, their poor fundamentals and bleak outlook paint a different picture. As a result, it could be wise to avoid these stocks this month. Let's discuss this in detail.
Monitoring a company’s insiders and institutional investors’ trading activity provides valuable insight into its potential for growth. While insider buying is often viewed favorably, one must exercise caution as it might not be a reliable signal. Hence, it could be better to analyze fundamentals and market conditions before investing rather than relying solely on insider buying.
Several macroeconomic headwinds suggest that a recession might be looming. The Leading Economic Index, which tracks business cycles, has experienced an unexpected and significant drop to its lowest level since November 2020. It marked the 12th straight month of decline, matching the longest streak since the 2007-2009 period.
Additionally, the Labor Department reported a 5000 increase in initial claims for state unemployment benefits for the week ending on April 15th. Adding to declining retail sales and manufacturing, this labor market weakness could indicate an impending recession.
That being said, despite recent insider activity, fundamentally weak stocks UMH and REVB might be best avoided in April.
Let’s delve deeper into the featured stocks.
UMH Properties, Inc. (UMH)
UMH is a public equity Real Estate Investment Trust (REIT) that manages 135 manufactured home communities with roughly 25,700 developed homesites. Additionally, it operates two communities in Florida through a joint venture with Nuveen Real Estate.
Over the past week, UMH’s CEO and two other directors, Samuel A. Landy, Angela D Pruitt, and William Edward Mitchell, bought 140, 70, and 70 shares of UMH, respectively, at $14.13 per share. Total shares worth $5.93 thousand were bought.
For the fourth quarter that ended December 31, 2022, UMH’s total expenses increased 13.6% year-over-year to $42.58 million. FFO attributable to common shareholders decreased 1.2% year-over-year to $9.97 million, and FFO per common share came in at $0.18, down 10% from the year-ago value.
The stock has plunged 41.1% over the past year to close the last trading session at $14.82.
UMH’s POWR Ratings reflect its bleak outlook. The stock has an overall rating of D, translating to Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
UMH has a D grade for Value and Quality. It is ranked #43 among 47 stocks within the D-rated REITs - Diversified industry.
In addition to the POWR Ratings just highlighted, you can see UMH’s ratings for Stability, Momentum, Sentiment, and Growth here.
Revelation Biosciences, Inc. (REVB)
REVB develops and commercializes immune system therapeutics and diagnostics. Its therapeutic product candidates include REVTx-100, for preventing and treating bacterial infections; REVTx-200, a potential intranasal therapy; and REVTx-300, a potential therapy for chronic organ diseases.
Over the past week, George F Tidmarsh, Director at REVB, bought 51.50k shares for a total of $59.74 thousand at $1.16 per share.
In the fiscal year that ended on December 31, 2022, REVB incurred a loss from operations of $10.86 million, while its net loss and loss per share were $10.83 million and $20.09, respectively. As of December 31, 2022, the company’s total liabilities stood at $4.45 million, compared to $2.14 million as of December 31, 2021.
Analysts expect REVB to report a loss per share of $2.10 for the fiscal year ending December 2023. The company’s loss per share for the next fiscal year (ending December 2024) is expected to come in at $2.73. The stock has plummeted 97% over the past year to close the last trading session at $1.09.
REVB’s POWR Ratings reflect its weak fundamentals. The stock has an overall rating of D, equating to Sell in our proprietary rating system.
The stock has an F grade for Stability and a D for Momentum and Quality. It is ranked #284 out of 381 stocks within the F-rated Biotech industry.
Click here to see the other ratings of REVB for Value, Sentiment, and Growth.
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UMH shares were trading at $14.93 per share on Friday afternoon, up $0.11 (+0.74%). Year-to-date, UMH has declined -6.22%, versus a 8.16% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal Sugandh
Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.
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