Strategic Oil & Gas: 3 Different Insiders Have Purchased Shares This Year

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 |  About: Strategic Oil & Gas Ltd. (SOGFF), Includes: MKRYF, OEXFF
by: Markus Aarnio

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%.

Strategic Oil & Gas (OTCPK:SOGFF) engages in the exploration and development of petroleum and natural gas reserves in Western Canada.

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Insider buying during the last 30 days

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

Name Title Trade Date Shares Purchased Current Ownership Increase In Shares
Thomas Claugus Chairman Jan 17 4,867,000 80,547,300 shares +6.4%
Shelina Hirji VP Jan 30 10,000 10,000 shares from 0 to 10,000
Gurpreet Sawhney CEO Jan 28 109,000 1,199,810 shares +10.0%
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There have been 4,986,000 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
January 2014 4,986,000 0
December 2013 0 0
November 2013 120,000 0
October 2013 326,000 10,000
September 2013 22,432,100 0
August 2013 2,268,500 0
July 2013 3,480,300 10,000
June 2013 2,302,200 83,333
May 2013 106,500 0
April 2013 143,500 10,000
March 2013 8,000,000 0
February 2013 0 0
January 2013 0 158,000
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There have been 44,165,100 shares purchased, and there have been 271,333 shares sold by insiders since January 2013.

Financials

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

Revenue $22.6 million
Funds from operations $4.9 million
Net loss $6.8 million
Net debt $81.6 million
Production 3,510 boed
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Outlook

Strategic's guidance is as follows:

Q4/2013 FY2013 Q1/2014 FY2014
Production / boed 2,800 3,200 3,700 4,400-4,600
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Strategic's shares plunged after the company released this guidance on January 17. The insiders started buying the shares after this plunge.

Competition

Strategic's competitors include Manitok Energy (OTC:MKRYF), and RMP Energy (OTCPK:OEXFF). Here is a table comparing these companies.

Company SOGFF MKRYF OEXFF
Market Cap: 132.83M 161.78M 584.13M
Qtrly Rev Growth (yoy): 0.64 0.48 0.50
Revenue: 64.00M 57.41M 114.26M
EBITDA: 14.48M 29.42M 76.80M
Operating Margin: -0.26 0.10 0.18
Net Income: -18.73M 2.93M -3.97M
EPS: -0.10 0.04 -0.04
P/E: N/A 51.24 N/A
P/S: 1.83 2.85 5.30
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Strategic has the lowest P/S ratio among these three companies.

Here is a table of these competitors' insider-trading activities during the last 12 months.

Company Insider buying / shares Insider selling / shares
MKRYF 416,400 25,000
OEXFF 252,385 1,296,250
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Only Strategic has seen intensive insider buying during the last 30 days.

Conclusion

There have been three different insiders buying Strategic, and there have not been any insiders selling Strategic during the last 30 days. Two of these three insiders increased their holdings by more than 10%. Strategic has an insider ownership of 34.7%.

Strategic has a book value of $0.52 per share. I believe the stock could be a good pick below the book value based on the intensive insider buying.

Disclosure: I am long SOGFF. 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.