Seeking Alpha
Long/short equity, insider ownership
Profile| Send Message|
( followers)  

In this article, I will feature one utility 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%.

Capital Power Corporation (OTC:CPXWF) acquires, develops, and operates power generation facilities in Canada and the United States.

(click to enlarge)

Insider buying during the last 30 days

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

NameTitleTrade DateShares PurchasedCurrent OwnershipIncrease In Shares
Todd GilchristSVPFeb 6299299 sharesfrom 0 to 299
Philip LachambreDirectorJan 2464210,720 shares+6.4%
Stuart LeeCFOJan 222,28922,667 shares+11.2%
Darcy TrufynSVPFeb 381512,189 shares+7.2%

There have been 4,045 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

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

MonthInsider buying / sharesInsider selling / shares
February 20141,1140
January 20144,5310
December 201300
November 201300
October 20132,0300
September 201316,4170
August 20132,3850
July 201300
June 201300
May 201300
April 201300
March 20132,3560
February 20131,7960
January 201300

There have been 30,629 shares purchased, and there have been zero shares sold by insiders since January 2013.

Financials

Capital Power reported the third-quarter financial results on October 25 with the following highlights:

Revenue$380 million
Funds from operations$122 million
Net income$44 million
Net debt$2.0 billion

(click to enlarge)

(Source: Earnings presentation)

Outlook

Capital Power expects full-year 2013 financial results to exceed the high end of its annual guidance of $1.20 to $1.40 for normalized earnings per share and $3.80 to $4.20 for cash flow per share.

(click to enlarge)

(Source: Earnings presentation)

Competition

Capital Power's competitors include TransAlta Corp. (NYSE:TAC), Calpine Corp. (NYSE:CPN), and Iberdrola SA (OTCPK:IBDRY). Here is a table comparing these companies.

CompanyCPXWFTACCPNIBDRY
Market Cap:1.55B3.59B8.46B39.14B
Employees:N/A2,0842,15131,338
Qtrly Rev Growth (yoy):-0.040.190.20-0.11
Revenue:1.39B2.45B6.22B42.96B
Gross Margin:N/A0.390.230.38
EBITDA:466.77M959.01M1.39B7.78B
Operating Margin:0.170.160.120.08
Net Income:98.86M35.67M211.00M3.59B
EPS:1.410.140.472.29
P/E:13.7097.6641.7010.95
PEG (5 yr expected):N/A21.978.12N/A
P/S:1.121.441.330.90

Capital Power has the second-lowest P/S ratio among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
TAC4,2000
CPN10,00010,987,900
IBDRY

N/A

N/A

Only Capital Power has seen intensive insider buying during the last 30 days.

Conclusion

There have been four different insiders buying Capital Power, and there have not been any insiders selling Capital Power during the last 30 days. Two of these four insiders increased their holdings by more than 10%.

Capital Power has a book value of $27.22 per share. I believe the stock could be a good pick below the book value based on the intensive insider buying.

Source: Capital Power: 4 Different Insiders Have Purchased Shares During The Last 30 Days