Insiders Are Selling Whiting Petroleum

Nov. 3.13 | About: Whiting Petroleum (WLL)

In this article, I will feature one energy stock that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

Whiting Petroleum Corporation (NYSE:WLL), an independent oil and gas company, engages in the acquisition, exploration, exploitation, development, and production of crude oil, natural gas liquids, and natural gas in the United States.

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Insider selling during the last 30 days

Here is a table of Whiting Petroleum's insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Michael Stevens CFO Nov 1 23,936 No 49,118 shares + 66,992 options 17.1%
Mark Williams SVP Oct 28-29 14,250 No 44,582 shares + 14,448 options 19.4%
David Seery VP Oct 30 3,166 No 28,502 shares + 4,036 options 8.9%
Bruce DeBoer VP Oct 28 23,556 No 6,461 shares + 5,500 options 66.3%
Sherwin Artus Director Oct 28-30 6,000 No 49,873 shares 10.7%
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There have been 70,908 shares sold by insiders during the last 30 days. More details about the Rule 10b5-1 trading plan can be found from this link.

Insider selling by calendar month

Here is a table of Whiting Petroleum's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
November 2013 23,936 0
October 2013 46,972 0
September 2013 0 0
August 2013 0 0
July 2013 0 0
June 2013 0 0
May 2013 0 0
April 2013 0 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 70,908 shares sold and there have been zero shares purchased by insiders this year. The month of October has seen the most insider selling.

Financials

Whiting Petroleum reported the third-quarter financial results on October 23 with the following highlights:

Revenue $831.0 million
Net income $204.1 million
Cash $1.0 billion
Debt $2.9 billion
Production 8.53 MMBOE
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Outlook

Whiting Petroleum's guidance for the fourth quarter and full-year 2013 is as follows:

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Competition

Whiting Petroleum's competitors include Kodiak Oil & Gas (NYSE:KOG), Continental Resources (NYSE:CLR), and EOG Resources (NYSE:EOG). Here is a table comparing these companies.

Company WLL KOG CLR EOG
Market Cap: 7.85B 3.29B 20.86B 48.76B
Employees: 829 134 753 2,650
Qtrly Rev Growth (yoy): 0.36 1.02 0.69 0.39
Revenue: 2.53B 581.51M 3.02B 12.82B
Gross Margin: 0.70 0.79 0.81 0.86
EBITDA: 1.70B 397.42M 2.26B 6.51B
Operating Margin: 0.29 0.31 0.41 0.15
Net Income: 506.22M 100.45M 728.50M 1.00B
EPS: 4.25 0.38 3.96 3.70
P/E: 15.56 33.01 28.59 48.41
PEG (5 yr expected): 2.18 0.35 0.57 1.87
P/S: 3.14 5.92 6.95 3.79
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Whiting Petroleum has the highest PEG ratio among these four companies.

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

Company Insider buying / shares Insider selling / shares
KOG 0 725,000
CLR 1,500 47,891
EOG 0 349,407
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Only Whiting Petroleum has seen intensive insider selling during the past 30 days.

Conclusion

There have been five different insiders selling Whiting Petroleum and there have not been any insiders buying Whiting Petroleum during the past 30 days. Four of these five insiders decreased their holdings by more than 10%. Whiting Petroleum has an insider ownership of 0.10%.

Whiting Petroleum is trading at a P/E ratio of 15.56 and a forward P/E ratio of 15.41. Whiting Petroleum has a book value of $31.14 per share.

Before entering short Whiting Petroleum, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are relatively high PEG ratio and the intensive insider selling activity.

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.