3 Basic Materials Stocks With Recent Intensive Insider Buying

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 |  Includes: EEQ, OSKFF, TTI
by: Markus Aarnio

Since my January 22, 2013 article titled "3 Basic Materials Stocks With Recent Intensive Insider Buying", the stocks that I featured in the article have performed as follows:

Company Price 1/18 Price 3/14 Change
CVR Refining (NYSE:CVRR) $24.80 $34.71 +40.0%
Potash (NYSE:POT) $41.48 $40.93 -1.3%
Talisman Energy (NYSE:TLM) $12.38 $12.45 +0.6%
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In this article I will feature three additional basic materials stocks that have seen intensive insider buying during the last 30 days.

Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.
  2. The stock is sold by no insiders in the month of intensive purchasing.
  3. At least two purchasers increase their holdings by more than 10%.

1. Osisko Mining Corporation (OTCPK:OSKFF) operates the Canadian Malartic Gold Mine in Malartic, Quebec and is carrying out aggressive exploration and project development elsewhere in Canada and Latin America.

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Insider buying by insider (last 30 days)

  • John Burzynski purchased 20,000 shares on February 28 - March 8 and currently holds 405,300 shares or less than 0.1% of the company. John Burzynski is Vice-President, Corporate Development.
  • Marcel Côté purchased 41,000 shares on February 28 - March 8 and currently controls 173,830 shares or less than 0.1% of the company. Marcel Côté serves as a director of the company.
  • William MacKinnon purchased 15,000 shares on March 14 and currently holds 51,000 shares or less than 0.1% of the company. William MacKinnon serves as a director of the company.

Insider buying by calendar month

Here is a table of Osisko's insider trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
March 2013 31,000 0
February 2013 45,000 0
January 2013 2,798 0
December 2012 183,149 0
November 2012 30,000 0
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There have been 291,947 shares purchased and zero shares sold since November 2012.

Financials

The company reported the full year 2012 financial results on February 21 with the following highlights:

Revenue $665.4 million
Net income $78.4 million
Cash $112.6 million
Debt $337.4 million
Gold production 388,478 ounces
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Outlook

Osisko's full year 2013 gold production guidance is 485,000 to 510,000 ounces.

My analysis

There have been three different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. The stock is trading at a P/E ratio of 30.70 and a forward P/E ratio of 9.03. The company has a book value of $4.93 per share. There are 14 analyst buy ratings, three neutral ratings and zero sell ratings with an average target price of $10.28. The company's reserves are 10.1 million ounces of gold. I believe the stock could be a good pick from the current level based on the solid fundamentals.

2. Enbridge Energy Management, L.L.C., (NYSE:EEQ) owns and operates crude oil and liquid petroleum transportation and storage assets in the United States.

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Insider buying by insider (last 30 days)

  • Darren Yaworsky purchased 1,000 shares on March 7 and currently holds 1,000 shares or less than 0.1% of the company. Darren Yaworsky is Treasurer of the company.
  • Stephen Neyland purchased 4,500 shares on March 7 and currently holds 7,598 shares or less than 0.1% of the company. Stephen Neyland is Vice President, Finance.
  • John Loiacono purchased 1,000 shares on March 7 and currently holds 1,000 shares or less than 0.1% of the company. John Loiacono is Vice President, Commercial Activities.

Insider buying by calendar month

Here is a table of Enbridge's insider trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
March 2013 6,500 0
February 2013 0 0
January 2013 0 0
December 2012 0 0
November 2012 0 0
October 2012 0 0
September 2012 0 0
August 2012 0 0
July 2012 0 0
June 2012 0 0
May 2012 0 0
April 2012 0 0
March 2012 0 0
February 2012 0 0
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The month of March 2013 has seen all of the insider buying.

Financials

The company reported the full year 2012 financial results on February 13 with the following highlights:

Revenue $6.7 billion
Net income $369.2 million
Cash $0.1 million
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On February 26, 2013 the company announced that it priced its underwritten public offering for total gross proceeds of approximately $245.6 million.

Outlook

Mark Maki, President of the Partnership, commented on February 13:

"The long-term outlook for the Partnership remains strong. Our $8.5 billion secured growth program is proceeding on schedule and will progressively transform the Partnership towards an even lower risk business model as the cash flows are secured predominantly by long-term, low-risk commercial frameworks such as cost-of-service or demand-based contract structures. The Partnership's distributable cash flow growth will begin to accelerate once these accretive growth projects enter service, which will solidify our long-term distribution growth outlook of 2 to 5 percent annually. We expect business fundamentals will continue to improve later in 2013. As a result, we estimate the Partnership's EBITDA for 2013 will increase in excess of 10% and will be between $1,250 million and $1,350 million."

Competition

Enbridge's competitors include ONEOK Partners, L.P. (NYSE:OKS), TransCanada Corp. (NYSE:TRP) and Williams Companies (NYSE:WMB). Here is a table comparing these companies.

Company EEQ OKS TRP WMB
Market Cap: 8.44B 11.86B 33.74B 23.71B
Employees: N/A N/A 4,869 4,639
Qtrly Rev Growth (yoy): N/A -0.07 0.04 -0.11
Revenue: 6.71B 10.18B 8.16B 7.49B
Gross Margin: N/A 0.16 0.55 0.40
EBITDA: N/A 1.16B 4.02B 2.40B
Operating Margin: N/A 0.09 0.32 0.22
Net Income: 369.20M 660.14M 1.32B 723.00M
EPS: 1.27 3.04 1.88 1.37
P/E: 22.87 17.75 25.49 25.45
PEG (5 yr expected): 10.70 431.60 3.28 2.59
P/S: 1.26 1.17 4.13 3.17
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Enbridge's P/S ratio is in the lower end compared to its direct competitors.

My analysis

There have been three different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. There are two analyst buy ratings, three neutral ratings and zero sell ratings with an average target price of $32.25. The stock is trading at a P/E ratio of 22.87 and a forward P/E ratio of 21.38. The company has a book value of $14.38 per share and the stock has a dividend yield of 7.57%. I have a cautiously bullish bias for the stock currently based on the intensive insider buying.

3. TETRA Technologies (NYSE:TTI) operates as a diversified oil and gas services company. The company operates in three divisions: Fluids, Production Enhancement, and Offshore.

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Insider buying by insider (last 30 days)

  • Edwin Goldman purchased 9,975 shares on March 12 and currently holds 62,144 shares or less than 0.1% of the company. Edwin Goldman has served as Senior Vice President since August 2008.
  • Elijio Serrano purchased 11,000 shares on March 8 and currently holds 112,198 shares or 0.1% of the company. Elijio Serrano has served as Senior Vice President and Chief Financial Officer since August 2012.
  • Philip Longorio purchased 56,100 shares on March 7 and currently holds 123,434 shares or 0.2% of the company. Philip Longorio has served as Senior Vice President since February 2008.

Insider buying by calendar month

Here is a table of TETRA Technologies' insider trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
March 2013 77,075 0
February 2013 0 0
January 2013 0 0
December 2012 0 0
November 2012 286,800 0
October 2012 0 0
September 2012 0 0
August 2012 32,500 0
July 2012 0 0
June 2012 20,000 0
May 2012 66,500 0
April 2012 0 0
March 2012 0 0
February 2012 0 0
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The month of March 2013 has seen the most insider buying since November 2012.

Financials

The company reported the full year 2012 financial results on February 28 with the following highlights:

Revenue $880.8 million
Net income $16.0 million
Cash $74.0 million
Debt $331.3 million
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Competition

TETRA Technologies' competitors include Anadarko Petroleum (NYSE:APC), Halliburton (NYSE:HAL) and Weatherford International (NYSE:WFT). Here is a table comparing these companies.

Company TTI APC HAL WFT Industry Average (Oil & Gas Equipment & Services)
Market Cap: 747.00M 42.18B 39.10B 9.03B 519.11B
Employees: N/A 5,200 73,000 70,000 8.72K
Qtrly Rev Growth (yoy): 0.24 -0.10 0.03 0.09 0.09
Revenue: 880.83M 13.31B 28.50B 15.22B 4.41B
Gross Margin: 0.19 0.80 0.17 0.22 0.25
EBITDA: 111.45M 7.63B 6.09B 2.44B 915.98M
Operating Margin: 0.04 0.16 0.16 0.08 0.20
Net Income: 15.96M 2.38B 2.58B -778.00M N/A
EPS: 0.20 4.74 2.84 -1.02 8.20
P/E: 48.20 17.78 14.76 N/A 1,654.70
PEG (5 yr expected): 0.47 0.98 0.85 0.45 1.70
P/S: 0.85 3.17 1.37 0.59 2.51
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TETRA Technologies is trading below the industry average P/S ratio.

My analysis

There have been three different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. There are three analyst buy ratings, two neutral ratings and zero sell ratings with an average target price of $11.20. The stock is trading at a P/E ratio of 48.20 and a forward P/E ratio of 10.10. The company has a book value of $7.10 per share, which could be a good entry point for the stock.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in OTCPK:OSKFF over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.