Donnycreek Energy: 4 Different Insiders Have Purchased Shares This Month

Dec.21.13 | About: Donnycreek Energy (DONYF)

Editors' Note: This article covers a stock trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

In this article, I will feature one energy 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%.

Donnycreek Energy (OTCPK:DONYF) operates as an oil and natural gas exploration and production company in Canada.

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Insider buying during the last 30 days

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

Name Title Trade Date Shares Purchased Public Offering Current Ownership Increase In Shares
Randy Kwasnicia Director Dec 16 200,000 Yes 1,218,537 shares +19.6%
John Marsh Senior Officer Dec 16 10,600 Yes 35,600 shares +42.4%
Clayton Riddell 10% Owner Dec 16 395,400 Yes 1,957,900 shares +25.3%
Murray Scalf COO Dec 16 37,769 Yes 1,014,669 shares +3.9%
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There have been 643,769 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
December 2013 643,769 0
November 2013 0 28,000
October 2013 0 0
September 2013 0 0
August 2013 0 0
July 2013 1,217,000 0
June 2013 0 0
May 2013 0 0
April 2013 28,100 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 1,888,869 shares purchased and there have been 28,000 shares sold by insiders this year.

Financials

Donnycreek reported the fiscal 2013 full-year, which ended July 31, financial results on November 15 with the following highlights:

Revenue $4.8 million
Funds flow from operations $2.5 million
Net loss $1.3 million
Cash $30.0 million
Production 212 boe/d
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On December 16, Donnycreek closed a $8.0 million financing.

Outlook

Donnycreek's capital budget for fiscal 2014 allocates approximately $38.9 million to its Kakwa and Wapiti properties which are expected to be funded from cash on hand and funds flow from operations.

Competition

Donnycreek's competitors include Renegade Petroleum (OTC:RPTTF), and Surge Energy (OTCPK:ZPTAF). Here is a table comparing these companies.

Company DONYF RPTTF ZPTAF
Market Cap: 104.74M 174.16M 773.83M
Qtrly Rev Growth (yoy): 15.06 1.40 0.99
Revenue: 4.84M 178.72M 206.13M
EBITDA: 579.90K 79.86M 113.24M
Net Income: -1.33M -52.71M -76.67M
P/S: 20.30 0.96 3.73
P/B: 1.58 0.37 1.28
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Donnycreek has the fastest revenue growth among these three companies.

Here is a table of these competitors' insider-trading activities during the last 30 days.

Company Insider buying / shares Insider selling / shares
RPTTF 0 0
ZPTAF 162,667 63,656
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Only Donnycreek has seen intensive insider buying during the last 30 days.

Conclusion

There have been four different insiders buying Donnycreek and there have not been any insiders selling Donnycreek during the last 30 days. Three of these four insiders increased their holdings by more than 10%. Donnycreek has an insider ownership of 12%.

Donnycreek has an estimated net asset value of $4.09 per share. The insiders paid $2.40 for their shares at the December offering. I believe the stock could be a good pick below $2.40 based on the intensive insider buying.

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(Source: November presentation)

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