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

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.

(click to enlarge)

Insider buying during the last 30 days

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

NameTitleTrade DateShares PurchasedCurrent OwnershipIncrease In Shares
Dawn FarrellCEOMarch 320,00066,980 shares+42.6%
Brett GellnerCFOFeb 248,00052,928 shares+17.8%
Todd StackVPFeb 251,0002,810 shares+55.2%
Carolyn Dahl ReesSenior OfficerFeb 242,0005,100 shares+64.5%

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.

MonthInsider buying / sharesInsider selling / shares
March 201420,0000
February 201411,0000
January 201400
December 201300
November 20134,2000
October 201300
September 201300
August 201300
July 201300
June 201300
May 201300
April 201300
March 201300
February 201300
January 201300

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

(click to enlarge)

(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

(click to enlarge)

(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.

CompanyTACCPNCPXWFIBDRY
Market Cap:3.18B8.25B1.68B41.25B
Employees:2,7722,157N/AN/A
Qtrly Rev Growth (yoy):-0.090.12-0.04-0.04
Revenue:2.34B6.39B1.39B42.48B
Gross Margin:0.360.26N/A0.38
EBITDA:898.88M1.50B466.77M9.09B
Operating Margin:0.130.130.170.13
Net Income:-72.36M14.00M98.86M3.36B
EPS:-0.270.031.412.12
P/E:N/A650.0014.8212.55
PEG (5 yr expected):-1.314.09N/AN/A
P/S:1.351.271.210.97
Dividend Yield:5.53%N/A5.20%3.70%

TransAlta has the highest dividend yield among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
CPN020,007,500
CPXWF5,6450
IBDRY

N/A

N/A

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.

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