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

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%.

Tamarack Valley Energy (OTC:TNEYF) engages in the identification, evaluation, and operation of resource plays in the Western Canadian sedimentary basin.

(click to enlarge)

Insider buying during the last 30 days

Here is a table of Tamarack Valley Energy's insider-trading activity during the last 30 days.

NameTitleTrade DateShares PurchasedProspectusCurrent OwnershipIncrease In Shares
Noralee BradleySenior OfficerFeb 1411,500Yes64,031 shares+21.9%
Ken CruikshankVPFeb 192,500Yes112,420 shares+2.3%
GMT Capital Corp.10% OwnerFeb 10-12500,800No6,428,200 shares+8.4%
Niels GundesenVPFeb 195,000Yes74,641 shares+7.2%
Ron HozjanCFOFeb 193,800Yes11,800 shares+47.5%
Scott ReimondVPFeb 194,750Yes38,868 shares+13.9%
Kevin ScreenVPFeb 196,000Yes59,350 shares+11.2%
Dean SetoguchiDirectorFeb 195,000Yes61,161 shares+8.9%

There have been 539,350 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Tamarack Valley Energy's insider-trading activity by calendar month.

Month

Insider buying / shares

Insider selling / shares

February 2014539,3500
January 201400
December 201300
November 201300
October 201395,4750
September 201300
August 201300
July 2013031,900
June 2013050,000

May 2013

0

0

April 2013

12,0000

March 2013

0

0

February 2013

00

January 2013

12,080

0

There have been 658,905 shares purchased, and there have been 81,900 shares sold by insiders since January 2013. The month of February 2014 has seen the most insider buying.

Financials

Tamarack Valley Energy reported the third-quarter financial results on November 15 with the following highlights:

Revenue$19.1 million
Funds from operations$10.3 million
Net income$3.7 million
Net debt$57.1 million
Production3,162 boe/d

On February 19, Tamarack Valley Energy closed a $60.2 million financing.

News

On January 28, Tamarack Valley Energy announced that it had surpassed its 2013 average production and 2013 exit production guidance as a result of its continued success in the Cardium and Viking. Based on field production estimates for December 2013, the company averaged 4,718 boe/d (approximately 62% liquids), exceeding its exit production guidance rate of 4,200 to 4,300 boe/d.

Outlook

Tamarack Valley Energy's 2014 guidance is as follows:

  • 2014 estimate average production rate of 5,300 to 5,500 boe/d
  • 2014 estimate exit production rate of 6,500 to 6,700 boe/d (60% liquids)
  • Anticipated cash flow of $57 to $59 million

(click to enlarge)

(Source: Investor presentation)

Competition

Tamarack Valley Energy's competitors include Strategic Oil & Gas (OTCPK:SOGFF), and Manitok Energy (OTC:MKRYF). Here is a table comparing these companies.

CompanyTNEYFSOGFFMKRYF
Market Cap:252.29M144.35M172.99M
Qtrly Rev Growth (yoy):0.710.640.48
Revenue:53.79M64.00M57.41M
EBITDA:31.36M14.48M29.42M
Operating Margin:0.09-0.260.10
Net Income:1.53M-18.73M2.93M
EPS:0.05-0.100.04
P/E:164.90N/A54.79
P/S:4.692.203.09

Tamarack Valley Energy's market cap has been adjusted to the February offering. Tamarack Valley Energy sold 14,000,000 shares at the offering. As of February 25, Tamarack Valley Energy had 60,170,000 shares outstanding, which gives the company a market cap of $252.29 million. Tamarack Valley Energy has the fastest revenue growth among these three companies.

Here is a table of these competitors' insider-trading activities this year.

CompanyInsider buying / sharesInsider selling / shares
SOGFF5,573,0000
MKRYF14,30050,000

Strategic Oil & Gas has also seen intensive insider buying during the last 30 days.

Conclusion

There have been eight different insiders buying Tamarack Valley Energy, and there have not been any insiders selling Tamarack Valley Energy during the last 30 days. Four of these eight insiders increased their holdings by more than 10%. Tamarack Valley Energy's management and board own 7% of the company.

(click to enlarge)

(Source: Investor presentation)

The insiders purchased their shares at $3.91 (C$4.30) in the February offering. I believe Tamarack Valley Energy could be a good pick at $3.90 based on the intensive insider buying.

Source: Tamarack Valley Energy: 8 Different Insiders Have Purchased Shares This Month