TransAlta: 4 Different Insiders Have Purchased Shares During The Last 30 Days

Mar. 6.14 | About: TransAlta Corporation (TAC)

Summary

Four insiders purchased the stock within one month.

The stock was sold by no insiders in the month of intensive purchasing.

All four of these insiders increased their holdings by more than 10%.

TransAlta Corporation (NYSE:TAC) operates as a non-regulated electricity generation and energy marketing company in Canada, the United States, and Australia.

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Insider buying during the last 30 days

Here is a table of TransAlta's insider activity during the last 30 days.

Name Title Trade Date Shares Purchased Current Ownership Increase In Shares
Dawn Farrell CEO March 3 20,000 66,980 shares +42.6%
Brett Gellner CFO Feb 24 8,000 52,928 shares +17.8%
Todd Stack VP Feb 25 1,000 2,810 shares +55.2%
Carolyn Dahl Rees Senior Officer Feb 24 2,000 5,100 shares +64.5%
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There have been 31,000 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of TransAlta's insider activity by calendar month.

Month Insider buying / shares Insider selling / shares
March 2014 20,000 0
February 2014 11,000 0
January 2014 0 0
December 2013 0 0
November 2013 4,200 0
October 2013 0 0
September 2013 0 0
August 2013 0 0
July 2013 0 0
June 2013 0 0
May 2013 0 0
April 2013 0 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 35,200 shares purchased, and there have been zero shares sold by insiders since January 2013. The month of March 2014 has seen the most insider buying.

Financials

TransAlta reported the full-year 2013 financial results on February 20 with the following highlights:

Revenue $2.3 billion
EBITDA $1,023 million
Funds from operations $729 million
Free cash flow $295 million
Cash $42 million
Debt $4.3 billion
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(Source: Investor presentation)

The stock plunged after these results, and the insiders purchased their shares after the plunge.

Outlook

TransAlta's 2014 guidance is as follows:

EBITDA $1,015-$1,065 million
Free cash flow $293-$343 million
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(Source: Investor presentation)

Competition

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

Company TAC CPN CPXWF IBDRY
Market Cap: 3.18B 8.25B 1.68B 41.25B
Employees: 2,772 2,157 N/A N/A
Qtrly Rev Growth (yoy): -0.09 0.12 -0.04 -0.04
Revenue: 2.34B 6.39B 1.39B 42.48B
Gross Margin: 0.36 0.26 N/A 0.38
EBITDA: 898.88M 1.50B 466.77M 9.09B
Operating Margin: 0.13 0.13 0.17 0.13
Net Income: -72.36M 14.00M 98.86M 3.36B
EPS: -0.27 0.03 1.41 2.12
P/E: N/A 650.00 14.82 12.55
PEG (5 yr expected): -1.31 4.09 N/A N/A
P/S: 1.35 1.27 1.21 0.97
Dividend Yield: 5.53% N/A 5.20% 3.70%
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TransAlta has the highest dividend yield among these four companies.

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

Company Insider buying / shares Insider selling / shares
CPN 0 20,007,500
CPXWF 5,645 0
IBDRY

N/A

N/A
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Only TransAlta has seen intensive insider buying during the last 30 days.

Conclusion

There have been four different insiders buying TransAlta, and there have not been any insiders selling TransAlta during the last 30 days. All four of these insiders increased their holdings by more than 10%. TransAlta has an insider ownership of 2.23%.

The insiders purchased their shares at prices ranging from $11.46 (C$12.61) to $12.24 (C$13.46). I believe TransAlta could be a good pick below $12 based on the intensive insider buying.

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