Insiders Are Selling Carrizo Oil & Gas

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 |  About: Carrizo Oil & Gas, Inc. (CRZO), Includes: AXAS, CHK, STO
by: Markus Aarnio

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%.

Carrizo Oil & Gas (NASDAQ:CRZO), an independent energy company, engages in the exploration, development, and production of oil and gas primarily in the United States.

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Insider selling during the last 30 days

Here is a table of Carrizo Oil & Gas' insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
S.P. Johnson CEO Nov 1 6,000 Yes 650,837 shares 0.9%
Brad Fisher COO Oct 4-14 33,401 No 77,529 shares 30.1%
Gregory Evans VP Oct 4-10 15,383 No 52,574 shares 22.6%
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There have been 54,784 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 Carrizo Oil & Gas' insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
November 2013 6,000 0
October 2013 54,784 0
September 2013 6,000 0
August 2013 6,000 0
July 2013 6,000 0
June 2013 0 0
May 2013 76,201 0
April 2013 0 0
March 2013 0 0
February 2013 26,770 0
January 2013 7,896 0
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There have been 189,651 shares sold and there have been zero shares purchased by insiders this year.

Financials

Carrizo Oil & Gas reported the second-quarter financial results on August 7 with the following highlights:

Revenue $136.8 million
Net income $37.0 million
Cash $3.8 million
Debt $927.9 million
Production 2,565 MBoe
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Outlook

Carrizo Oil & Gas' guidance for the third quarter production is 27,633-29,700 boe/d.

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Competition

Carrizo Oil & Gas' competitors include Abraxas Petroleum (NASDAQ:AXAS), Chesapeake Energy (NYSE:CHK), and Statoil ASA (NYSE:STO). Here is a table comparing these companies.

Company CRZO AXAS CHK STO
Market Cap: 1.73B 270.61M 18.18B 75.11B
Employees: 208 101 12,000 23,028
Qtrly Rev Growth (yoy): 0.60 0.35 0.38 -0.02
Revenue: 449.77M 78.93M 14.61B 110.64B
Gross Margin: 0.88 0.57 0.40 0.39
EBITDA: 329.48M 31.27M 5.29B 37.13B
Operating Margin: 0.32 0.07 0.16 0.23
Net Income: 53.18M -22.05M -1.32B 6.66B
EPS: 2.01 -0.24 -2.18 2.09
P/E: 21.15 N/A N/A 11.31
PEG (5 yr expected): 1.28 N/A 0.30 -3.46
P/S: 3.86 3.43 1.24 0.68
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Carrizo Oil & Gas 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
AXAS 90,253 0
CHK 642,632 232,813
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Only Carrizo Oil & Gas has seen intensive insider selling during the past 30 days.

Conclusion

There have been three different insiders selling Carrizo Oil & Gas and there have not been any insiders buying Carrizo Oil & Gas during the past 30 days. Two of these three insiders decreased their holdings by more than 10%. Carrizo Oil & Gas has an insider ownership of 8.90%.

Carrizo Oil & Gas is trading at a P/E ratio of 21.15 and a forward P/E ratio of 12.76. The company has a book value of $16.43 per share.

Carrizo Oil & Gas has a $36 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $36 price target. I would place a stop loss at $48, which is the 4-year high. The two main reasons for the proposed short entry are bearish Point and Figure chart, and the intensive insider selling activity.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in CRZO 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.