EnerCare: 3 Different Insiders Have Purchased Shares Since November 20

Dec. 9.13 | About: Enercare, Inc. (CSUWF)

In this article, I will feature one consumer stock 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 increased their holdings by more than 10%.

EnerCare (OTCPK:CSUWF) engages in water heater rental and sub-metering businesses.

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Insider buying during the last 30 days

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

Name Title Trade Date Shares Purchased Current Ownership Increase In Shares
John Macdonald CEO Nov 20-Dec 6 9,200 53,425 shares +20.8%
Michael Rousseau Director Nov 27 2,000 12,000 shares +20.0%
William Wells Director Nov 20 10,000 20,000 shares +100%
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There have been 21,200 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
December 2013 1,100 0
November 2013 20,100 0
October 2013 0 0
September 2013 14,500 0
August 2013 400 0
July 2013 0 0
June 2013 4,000 0
May 2013 12,100 0
April 2013 0 0
March 2013 6,000 0
February 2013 0 0
January 2013 0 0
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There have been 62,200 shares purchased and there have been zero shares sold by insiders this year. The month of November has seen the most insider buying.

Financials

EnerCare reported the third-quarter financial results on November 14 with the following highlights:

Revenue $77.6 million
Net income $6.9 million
Cash $15.1 million
Debt $541.3 million
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(Source: Earnings presentation)

Outlook

In water heater rental business, EnerCare's key priorities are to improve attrition.

In sub-metering business, EnerCare's priorities are to grow the business to be cash flow positive by year end.

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(Source: Earnings presentation)

Competition

EnerCare's competitors include Reliance Home Comfort, Newton Home Comfort, and National Home Services. National Home Services is a subsidiary of Just Energy Group (NYSE:JE). Here is a table comparing these two companies.

Company CSUWF JE
Market Cap: 540.91M 1.01B
Qtrly Rev Growth (yoy): 0.08 0.20
Revenue: 277.50M 3.17B
Gross Margin: N/A 0.16
EBITDA: 165.99M 171.00M
Operating Margin: 0.23 0.03
Net Income: 1.97M 93.43M
EPS: 0.03 0.18
P/E: 272.94 38.84
P/S: 1.95 0.32
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EnerCare is trading at a higher P/S ratio than Just Energy. In Just Energy, there have been 835,517 shares purchased and there have been zero shares sold by insiders this year. Only EnerCare has seen intensive insider buying during the last 30 days.

Conclusion

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

EnerCare has a book value of $1.33 per share and the stock has a dividend yield of 7.0%. The 200-day moving average is currently at $9.14, which could be a good entry point for the stock based on the intensive insider buying.

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(Source: Earnings presentation)

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in OTCPK:CSUWF 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.