Cimarex Energy: 5 Different Insiders Have Sold Shares During The Last 30 Days

Jun.25.14 | About: Cimarex Energy (XEC)

Summary

5 insiders sold Cimarex Energy stock within one month.

The stock was not purchased by any insiders in the month of intensive selling.

2 of these 5 insiders decreased their holdings by more than 10%.

Cimarex Energy (NYSE:XEC) operates as an independent oil and gas exploration and production company primarily in Texas, Oklahoma, and New Mexico.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Paul Korus CFO June 13 4,516 No 129,712
shares
3.4%
Jerry Box Director June 12 1,922 No 11,960
shares
13.8%
Joseph Albi COO May 30-June 12 10,000 No 150,756 shares 6.2%
Michael Sullivan Director June 6 1,500 No 17,128 shares 8.1%
Stephen Bell EVP May 28 17,601 No 118,726 shares 12.9%
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There have been 35,539 shares sold by insiders during the last 30 days.

Insider selling by calendar month

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

Month Insider selling / shares Insider buying / shares
June 2014 14,938 0
May 2014 31,418 0
April 2014 0 0
March 2014 48,565 0
February 2014 83,000 0
January 2014 16,600 0
December 2013 4,976 0
November 2013 4,359 0
October 2013 2,500 0
September 2013 34,001 0
August 2013 34,595 0
July 2013 3,823 0
June 2013 0 0
May 2013 2,500 0
April 2013 0 0
March 2013 74,400 0
February 2013 3,200 0
January 2013 13,101 0
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There have been 371,976 shares sold and there have been zero shares purchased by insiders since January 2013.

Financials

Cimarex Energy reported the first-quarter financial results on May 6 with the following highlights:

Revenue $599.2 million
Net income $138.5 million
Cash $4.5 million
Debt $1.0 billion
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The five insiders sold their shares after these results.

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(Source: Investor presentation)

Outlook

Cimarex Energy's production guidance is as follows:

Q2/2014 810-830 Mmcfe/d
FY2014 822-847 Mmcfe/d
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(Source: Investor presentation)

Competition

Cimarex Energy's competitors include Newfield Exploration Company (NYSE:NFX), Cabot Oil & Gas (NYSE:COG), and Chesapeake Energy (NYSE:CHK). Here is a table comparing these companies.

Company XEC NFX COG CHK
Market Cap: 11.95B 5.64B 14.11B 19.64B
Employees: 908 1,548 684 10,800
Qtrly Rev Growth (yoy): 0.41 0.50 0.37 0.47
Revenue: 2.17B 1.97B 1.88B 19.13B
Gross Margin: 0.80 0.74 0.77 0.33
EBITDA: 1.49B 1.08B 1.29B 5.84B
Operating Margin: 0.38 0.21 0.34 0.15
Net Income: 601.23M 137.00M 343.98M 833.00M
EPS: 7.03 3.08 0.82 1.27
P/E: 19.53 13.75 41.23 23.80
PEG (5 yr expected): 1.48 4.71 0.56 0.42
P/S: 5.70 2.95 7.77 1.06
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Cimarex Energy has the second-highest P/S ratio among these four companies.

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

Company Insider buying / shares Insider selling / shares
NFX 0 169,752
COG 0 30,000
CHK 75,250 32,500
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Newfield Exploration has also seen intensive insider selling during the last 30 days.

Conclusion

There have been five different insiders selling Cimarex Energy and there have not been any insiders buying Cimarex Energy during the last 30 days. Two of these five insiders decreased their holdings by more than 10%. Cimarex Energy has an insider ownership of 6.15%.

Before going short Cimarex Energy, I would like to get a bearish confirmation from the Point & Figure chart. The main reason for the proposed short entry is the intensive insider-selling activity.

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.