Insiders Are Buying Inter Pipeline

Oct. 4.13 | About: Inter Pipeline (IPPLF)

In this article, I will feature one pipeline company that has 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%.

Inter Pipeline (OTCPK:IPPLF) is a Canadian company engaged in petroleum transportation, natural gas liquids extraction, and bulk liquid storage business.

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Insider buying during the last 30 days

  • James Arsenych purchased 10,000 shares on September 12 and currently holds 10,000 shares or less than 0.1% of the company. James Arsenych is Vice President, Legal. James Arsenych increased his holdings from zero shares to 10,000 shares in September.
  • Duane Keinick purchased 3,000 shares on October 3 and currently holds 3,000 shares or less than 0.1% of the company. Duane Keinick serves as a director of the company. Duane Keinick increased his holdings from zero shares to 3,000 shares in October.
  • William Robertson purchased 10,000 shares on October 3 and currently holds 10,000 shares or less than 0.1% of the company. William Robertson serves as a director of the company. William Robertson increased his holdings from zero shares to 10,000 shares in October.

Insider buying by calendar month

Here is a table of Inter Pipeline's insider-trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
October 2013 13,000 0
September 2013 10,000 0
August 2013 0 0
July 2013 0 0
June 2013 0 0
May 2013 0 0
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There have been 23,000 shares purchased and there have been zero shares sold by insiders since May 2013.

Financials

Inter Pipeline reported the second-quarter financial results on August 8 with the following highlights:

Revenue $320.3 million
Funds from operations $105.4 million
Cash $48.2 million
Debt $3.6 billion
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Outlook

Inter Pipeline's business strategy is to acquire and develop long-life, high-quality energy infrastructure assets that generate stable and predictable cash flow. Inter Pipeline continues to advance this strategy through the successful development of its large portfolio of growth initiatives within its four well established business segments. With over $2.7 billion of organic growth projects currently underway, longer term cash flows are expected to materially increase and provide steady and growing distributions to shareholders.

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Competition

Inter Pipeline's competitors include Enterprise Products Partners LP (NYSE:EPD), Kinder Morgan (NYSE:KMI), and Williams Companies (NYSE:WMB). Here is a table comparing these companies.

Company KMI EPD IPL WMB Industry Average (Oil & Gas Pipelines)
Market Cap: 36.64B 55.41B 6.85B 24.80B 5.05B
Employees: 10,685 N/A N/A 4,639 1.34K
Qtrly Rev Growth (yoy): 0.56 0.14 0.14 -0.04 0.18
Revenue: 12.39B 44.07B 1.28B 7.20B 1.63B
Gross Margin: 0.50 0.08 N/A 0.40 0.38
EBITDA: 5.30B 4.47B 575.04M 2.35B 278.70M
Operating Margin: 0.29 0.07 0.35 0.21 0.13
Net Income: 1.11B 2.51B -92.83M 615.00M N/A
EPS: 0.95 2.77 -0.34 0.91 0.95
P/E: 37.11 21.93 N/A 39.85 29.88
PEG (5 yr expected): 0.60 4.28 N/A 4.56 2.79
P/S: 2.96 1.26 5.36 3.45 3.24
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Inter Pipeline has the highest P/S ratio among these four companies.

Here is a table of these competitors' insider-trading activities this year.

Company Insider buying / shares Insider selling / shares
EPD 4,500 47,286
KMI 1,402,750 0
WMB 7,800 119,275
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Only Inter Pipeline has seen intensive insider buying during the past 30 days.

Conclusion

There have been three different insiders buying Inter Pipeline and there have not been any insiders selling Inter Pipeline during the past 30 days. All three of these insiders increased their holdings by more than 10%.

Inter Pipeline has a dividend yield of 5.2%. The 200-day moving average is currently at $23.33, which could be a good entry point for the stock.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within 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.