In this article, I will feature one gas station retailer that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:
The stock is purchased by three or more insiders within one month.
The stock is sold by no insiders in the month of intensive purchasing.
At least two purchasers increase their holdings by more than 10%.
Murphy USA (NYSE:MUSA) offers retail marketing of motor fuel products and convenience merchandise through a chain of 1,172 retail stations.
Insider buying during the last 30 days
- Thomas Gattle purchased 1,000 shares on August 26 - September 4 and currently holds 1,100 shares or less than 0.1% of the company. Thomas Gattle serves as a director of the company.
- Jack Taylor purchased 5,000 shares on August 26 and currently holds 5,000 shares or less than 0.1% of the company. Jack Taylor serves as a director of the company.
- Andrew Clyde purchased 4,000 shares on August 26-27 and currently holds 4,000 shares or less than 0.1% of the company. Andrew Clyde is President and CEO of the company.
Insider buying by calendar month
Here is a table of Murphy USA's insider-trading activity by calendar month.
|Month||Insider buying / shares||Insider selling / shares|
There have been 10,000 shares purchased and there have been zero shares sold by the insiders since August 2013.
Murphy USA reported the pro forma first six months, ending June 30, financial results with the following highlights:
|Net income||$88.2 million|
|Book value||$10.04 per share|
Murphy USA believes that by continuing to grow with Wal-Mart (NYSE:WMT) and focusing on low price, high volume fuel retail strategy Murphy USA is ideally positioned to expand its presence in the large and growing demographic of value-oriented consumers. Murphy USA seeks to drive value by generating high returns at its kiosks, through low operating, overhead and capital costs, and utilizing its midstream business to gain a fuel cost advantage. While fuel prices and margins will be volatile, Murphy USA expects to put in place a capital structure that will allow it to invest through the cycle and provide long-term growth to its stockholders.
The U.S. petroleum business is highly competitive, particularly with regard to accessing and marketing petroleum and other refined products.
Murphy USA competes with other chains of retail fuel stations for fuel supply and in the retail sale of refined products to end consumers, primarily on the basis of price, but also on the basis of convenience and consumer appeal.
In addition, Murphy USA may also face competition from other retail fueling stations that adopt marketing strategies similar to Murphy USA's by associating with non-traditional retailers, such as supermarkets, discount club stores and hypermarkets, particularly in the geographic areas in which Murphy USA operates. Murphy USA expects that the industry will continue to trend toward this model, resulting in increased competition over time.
Moreover, because Murphy USA does not produce or refine any of the petroleum or other refined products that it markets, and Murphy Oil (NYSE:MUR) does not currently and will not in the future supply Murphy USA with refined products, Murphy USA competes with retail gasoline companies that have ongoing supply relationships with affiliates or former affiliates that manufacture refined products.
Murphy USA also competes with integrated companies that have their own production and/or refining operations that are at times able to offset losses from marketing operations with profits from producing or refining operations, and may be better positioned to withstand periods of depressed retail margins or supply shortages. In addition, Murphy USA competes with other retail and wholesale gasoline marketing companies that have more extensive retail outlets and greater brand name recognition.
There have been three different insiders buying Murphy USA and there have not been any insiders selling Murphy USA during the last 30 days. All three of these insiders increased their holdings by more than 10%. Murphy USA has an insider ownership of 6.16%.
Murphy USA is currently trading at 3.85 times its book value of $10.04 per share. Using the first six months earnings the stock has a P/E ratio of 10.24. I have a cautiously bullish bias for the stock currently based on the intensive insider buying.