4 Insiders Are Buying Atlas Stock

Jun.12.14 | About: Atlas Resource (ARP)

Summary

Recently, 4 insiders transacted a total of 52,530 shares at an average price of $19.73.

Overall, 53,955 shares were bought and 0 shares were sold in the last twelve months.

Together, insiders hold 0.7% of the shares outstanding.

Recently, Atlas Resource Partners LP (NYSE: ARP) has seen strong insider buying around the $20 range.

The Atlas Structure

According to management, "Atlas Resource Partners, L.P. is an E&P master limited partnership active in oil and gas production in the Barnett Shale (TX), the Appalachian Basin, the Raton Basin (NM), the Black Warrior Basin (AL) and the Mississippi Lime (OK). ARP owns an interest in over 12,000 producing natural gas and oil wells, representing ~1.4 Tcfe of net proved reserves."

Atlas Energy, L.P. (NYSE: ATLS) owns all of the Class A general partner units of Atlas Resource Partners, LP, incentive distribution rights, and about 28% LP interest in Atlas Resource Partners, L.P. Atlas Energy also wholly owns and operates Atlas Pipeline Partners, L.P. (NYSE: APL).

Atlas Pipeline Partners, L.P. is a full service midstream company providing reliable gas gathering, compression, processing and treating services to its customers. The partnership owns and/or operates approximately 11,200 miles of active natural gas gathering systems located in Oklahoma, Kansas and Texas, and approximately 100 miles of active natural gas gathering systems located in Tennessee.

Thus, Atlas Energy L.P. controls the operations of Atlas Resource Partners.

History

I have illustrated the price history of the GP firm below.

ATLS Chart

ATLS data by YCharts

Similarly, ARP is trading near the 52-week low as well.

Recent Transactions

Name Position Shares Transacted Transaction Price Date
MCGRATH SEAN P Officer 2,530 $19.68 5/20/2014
JONES MATTHEW A Officer 10,000 $19.71 5/19/2014
COHEN JONATHAN Z Officer 20,000 $19.74 5/19/2014
COHEN EDWARD E Officer 20,000 $19.80 5/19/2014
Click to enlarge

Recently, 4 insiders transacted a total of 52,530 shares at an average price of $19.73.

Insider Transactions in the Last Twelve Months

Date Net # of Transactions Shares Bought Shares Sold Net Shares Transacted Price Monthly Volume
Jun-14 $19.71 4,507,000
May-14 4 52,530 52,530 $19.81 29,570,000
Apr-14 6 1,425 1,425 $21.23 9,560,000
Mar-14 $20.89 20,256,000
Feb-14 $21.66 8,144,000
Jan-14 $22.46 6,700,000
Dec-13 $20.48 7,119,000
Nov-13 $20.68 8,800,000
Oct-13 $20.33 7,214,000
Sep-13 $20.94 4,737,000
Aug-13 $20.75 4,710,000
Jul-13 $21.86 15,789,000
Click to enlarge

Overall, 53,955 shares were bought and 0 shares were sold in the last twelve months.

Current Insider Holdings

Holder Name Amount Held % Shares Outstanding Latest Chg Filing Date
COHEN JONATHAN Z 176,507 0.22% 0 5/19/2014
COHEN EDWARD E 114,399 0.14% 0 5/19/2014
JONES MATTHEW A 63,273 0.08% 0 5/19/2014
HERZ DANIEL C 63,242 0.08% 0 5/17/2013
KOTEK FREDDIE M 58,660 0.07% 0 5/15/2012
LEOPOLD DAVE 25,000 0.03% 0 12/6/2013
MCGRATH SEAN P 22,599 0.03% 0 5/20/2014
SCHUMACHER MARK D 14,153 0.02% 0 10/24/2013
WOLF BRUCE M 11,177 0.01% 475 4/3/2014
WASHINGTON LISA 9,350 0.01% -983 5/15/2013
SLOTTERBACK JEFFREY M 6,031 0.01% 0 5/15/2012
CRAIG DOLLY ANN 1,141 0.00% 475 4/3/2014
KEY JEFFREY C 692 0.00% 475 4/3/2014
MAGARICK HARVEY G 287 0.00% 0 9/24/2013
CONIGLIO ANTHONY 217 0.00% 0 4/3/2013
Click to enlarge

Together, insiders hold 0.7% of the shares outstanding.

Source: Form 4

From the comparables table below, you can see that ARP has much higher Revenue and EBITDA growth relative to peers. Meanwhile, the firm trades below the median and average in terms of EV/Revenue.

Comparables Table

Ticker (NYSE:ARP) (NYSE:QRE) (BBEP) (NASDAQ:MEMP) (NASDAQ:MCEP) (NYSE:LRE)
Company Name: ATLAS RESOURCE P QR ENERGY LP BREITBURN ENERGY MEMORIAL PRODUCT MID-CON ENERGY P LRR ENERGY LP
Latest Fiscal Year: 12/2013 12/2013 12/2013 12/2013 12/2013 12/2013
Latest Available Period Date: 3/31/2014 3/31/2014 3/31/2014 3/31/2014 3/31/2014 12/31/2013
52-Week High 23.18 18.95 21.84 24.00 27.05 18.45
52-Week High Date 3/14/2014 5/5/2014 6/9/2014 5/1/2014 10/21/2013 10/23/2013
52-Week Low 18.30 14.76 14.01 18.19 20.75 13.41
52-Week Low Date 7/5/2013 7/5/2013 7/5/2013 7/5/2013 6/5/2014 7/5/2013
Daily Volume 423,910 175,979 410,636 258,839 46,640 54,841
Current Price: 19.72 17.68 21.63 23.08 21.43 17.34
52-Week High % Change -14.9% -6.7% -1.0% -3.8% -20.8% -6.0%
52-Week Low % Change 7.8% 19.8% 54.4% 26.9% 3.3% 29.3%
Total Common Shares (M) 59.45 64.8 119.2 61.3 19.3 26.3
Market Capitalization 1,563.6 1,147.0 2,587.7 1,413.7 451.4 454.2
Total Debt 889.4 974.7 1,931.6 988.4 112.0 250.0
Preferred Stock 180.5 392.6 - - - -
Minority Interest 0.0 8.8 - 5.6 - -
- Cash and Equivalents 2.0 23.3 1.8 1.7 1.4 4.4
Current Enterprise Value 2,631.6 2,499.9 4,517.6 2,405.9 574.0 699.7
Valuation Average Median
Total Revenue LFY 467.7 455.6 663.8 343.6 86.0 114.9 355.3 399.6
LTM 513.0 473.4 727.6 400.3 86.0 123.0 387.2 436.8
FY+1 720.4 545.1 905.5 548.4 95.7 131.6 491.1 546.8
FY+2 853.6 647.5 1,075.6 695.9 111.7 149.4 589.0 671.7
EV/Total Revenue LFY 5.01x 5.28x 6.49x 6.20x 6.42x 6.04x 5.9x 6.1x
LTM 4.76x 5.07x 5.92x 5.93x 6.42x 5.64x 5.6x 5.8x
FY+1 3.65x 4.59x 4.99x 4.39x 5.99x 5.32x 4.8x 4.8x
FY+2 3.08x 3.86x 4.20x 3.46x 5.14x 4.68x 4.1x 4.0x
EBITDA LFY 118.8 232.2 342.3 185.6 51.8 3.0 155.6 152.2
LTM 149.7 245.5 371.8 258.9 51.8 12.6 181.7 197.6
FY+1 331.0 298.0 521.9 338.8 60.7 87.8 273.0 314.5
FY+2 412.1 357.0 614.2 445.8 71.6 99.2 333.3 384.6
EV/EBITDA LFY 19.70x 10.36x 12.59x 11.47x 10.65x 232.10x 49.5x 12.0x
LTM 17.58x 10.18x 12.15x 9.29x 11.07x 55.32x 19.3x 11.6x
FY+1 7.95x 8.39x 8.66x 7.10x 9.46x 7.97x 8.3x 8.2x
FY+2 6.39x 7.00x 7.36x 5.40x 8.01x 7.05x 6.9x 7.0x
EPS LFY -0.72 0.36 0.14 0.64 1.83 -0.25 0.33 0.25
LTM -1.22 -1.96 0.47 0.15 1.83 0.18 -0.09 0.17
FY+1 0.21 1.09 0.68 1.80 1.57 1.12 1.08 1.11
FY+2 0.92 1.13 0.92 2.41 1.76 1.20 1.39 1.16
P/E LFY - 47.56x 145.29x 34.28x 12.49x - 59.9x 40.9x
LTM - - 46.02x 153.87x 11.71x 96.33x 77.0x 71.2x
FY+1 95.27x 16.26x 32.00x 12.79x 13.68x 15.44x 30.9x 15.9x
FY+2 21.46x 15.72x 23.49x 9.60x 12.17x 14.47x 16.1x 15.1x
Revenue Growth 1 Year 74.7% 22.5% 59.0% 144.3% 31.8% -4.9% 54.6% 45.4%
5 Year - - 30.6% - - - 30.6% 30.6%
EBITDA Growth 1 Year 309.4% 31.8% 106.0% 176.2% 25.7% -95.4% 92.3% 68.9%
5 Year - 12.6% 4.1% 57.2% - -53.1% 5.2% 8.3%
EBITDA Margin LTM 29.18% 51.9% 51.1% 64.7% 60.3% 10.3% 44.6% 51.5%
FY+1 45.95% 54.7% 57.6% 61.8% 63.4% 66.8% 58.4% 59.7%
FY+2 48.28% 55.1% 57.1% 64.1% 64.1% 66.4% 59.2% 60.6%
Click to enlarge

Conclusions

Atlas Resource Partners is a company that thrives on production and distribution growth, having increased production 614% and distributions per unit 45% since Q1/2012. The firm's acquisition based model focuses on mature, long-lived properties to provide operating scale and bolt-on growth. Furthermore, I believe that the recent insider purchases demonstrate management's confidence in the partnership, and I would consider purchasing the stock below the $19 level.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.