Penn West Petroleum: 3 Different Insiders Have Purchased Shares During The Last 30 Days

Apr. 2.14 | About: Penn West (PWE)

Summary

Three insiders purchased Penn West stock within one month.

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

Two of these three insiders increased their holdings by more than 10%.

Penn West Petroleum (NYSE:PWE) acquires, explores, develops, exploits, and holds interests in petroleum and natural gas properties and related assets in western Canada.

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Insider buying during the last 30 days

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

Name Title Trade Date Shares Purchased Current Ownership Increase In Shares
George Brookman Director March 10 1,000 15,500 shares +6.9%
Gillian Denham Director March 10 10,600 20,600 shares +106.0%
Richard George Chairman Mar 25-Apr 1 50,000 365,200 shares +15.9%
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There have been 61,600 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

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

Month Insider buying / shares Insider selling / shares
April 2014 20,000 0
March 2014 41,600 0
February 2014 0 0
January 2014 2,200 0
December 2013 82,050 0
November 2013 190,700 0
October 2013 0 0
September 2013 22,800 0
August 2013 0 1,500
July 2013 0 0
June 2013 1,397,330 23,696
May 2013 597,862 10,000
April 2013 0 0
March 2013 0 0
February 2013 0 14,229
January 2013 40,149 20,000
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There have been 2,394,691 shares purchased, and there have been 69,425 shares sold by insiders since January 2013.

Financials

Penn West reported the full-year 2013 financial results on March 7 with the following highlights:

Revenue C$2.8 billion
Funds flow C$1.1 billion
Net loss C$838 million
Production 135,093 boe/d
Net debt C$2.5 billion
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The three insiders purchased their shares after these results.

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(Source: Earnings presentation)

Outlook

Penn West's 2014 guidance is as follows:

Development capital expenditures $900 million
Average production 101,000 - 106,000 boe/d
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For the first quarter of 2014, Penn West's development capital budget is approximately $230 million.

Competition

Penn West's competitors include Encana Corporation (NYSE:ECA) and Canadian Natural Resources (NYSE:CNQ). Here is a table comparing these companies.

Company PWE ECA CNQ
Market Cap: 4.12B 15.79B 41.97B
Employees: N/A 3,303 N/A
Qtrly Rev Growth (yoy): -0.24 -0.11 0.07
Revenue: 2.36B 5.86B 16.45B
Gross Margin: 0.62 0.50 0.54
EBITDA: 1.19B 2.60B 8.27B
Operating Margin: -0.31 0.17 0.19
Net Income: -854.04M 236.00M 2.31B
EPS: -1.76 0.32 2.12
P/E: N/A 66.59 18.15
PEG (5 yr expected): 8.91 1.14 0.64
P/S: 1.73 2.70 2.54
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Penn West has the lowest P/S ratio among these three companies.

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

Company Insider buying / shares Insider selling / shares
ECA 10,000 0
CNQ 548,292 1,129,350
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Only Penn West has seen intensive insider buying during the last 30 days.

Conclusion

There have been three different insiders buying Penn West, and there have not been any insiders selling Penn West during the last 30 days. Two of these three insiders increased their holdings by more than 10%. Penn West has an insider ownership of 4.96%.

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(Source: Earnings presentation)

The three insiders purchased their shares at prices ranging from $8.40 (C$9.24) to $8.76 (C$9.64). I believe Penn West could be a good pick below $8.76 based on the intensive insider buying.

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(Source: Earnings presentation)

Disclosure: I am long PWE. 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.