We present here two noteworthy buys and nine noteworthy sells in the basic materials and energy sectors from Friday's SEC Form 4 (insider trading) filings, as part of our daily and weekly coverage of insider trades. These were selected by a review of 480 separate transactions in over 275 different companies that were filed with the SEC on Friday. The filings are noteworthy based on the dollar amount sold, the number of insiders buying or selling, and based on whether the overall buying or selling represents a strong pick-up based on historical buying and selling in the stock (for more info on how to interpret insider trades, please refer to the end of this article):
Arch Coal Inc. (ACI): ACI is engaged in the production of steam and metallurgical coal from surface and underground mines. Insiders hold 0.6 million or 0.3% of outstanding shares. On Friday, VP & Chief Accounting Officer John Lorson filed SEC Form 4 indicating that he exercised options and sold the resulting 15,000 shares for $0.21 million, ending with 600 shares in direct and 689 shares in indirect holdings (not including derivative holdings). This is on top of the 105,300 shares sale that we reported earlier this year by insiders, so that overall insiders sold over 0.12 million shares in the past eight weeks. In comparison, insiders sold a total of 0.17 million shares in the past year.
ACI recently, on February 10th, reported a disappointing Q4, missing earnings (29c v/s 31c) and revenue ($1.23 billion v/s $1.30 billion), and more importantly projecting softening market demand, especially in the thermal coal market as utilities increasingly shift to natural gas due to cost advantages. As a result, analyst estimates for FY 2013 have dropped off a cliff from $3.03 just 60 days ago to $1.35 now. The stock meanwhile has flat-lined in the last few months, and may indeed have more room on the downside if the pickup in metallurgical coal demand does not pan out and/or the demand for thermal coal drops even further. Its shares currently trade on par at 10-11 forward P/E and 0.8 P/B compared to averages of 10.7 and 2.0 for the coal mining group, while earnings are projected to increase at 12.3% compound growth rate from $1.07 in 2011 to $1.35 in 2013.
Freeport McMoran Copper & Gold (FCX): FCX is engaged in the exploration and development of copper, gold, silver and molybdenum mines in Indonesia, North and South America. On Friday, Chairman of the Board James Moffett filed SEC Form 4 indicating that he exercised options to purchase 250,000 shares, and sold 176,500 shares for $7.5 million, ending with 3.0 million shares in direct and over 62,000 shares in indirect holdings after the sale (not including derivative holdings). In comparison, insiders sold a total of 0.7 million shares in the past year. FCX trades at 7-8 forward P/E and 2.7 P/B compared to averages of 19.5 and 2.3 for its peers in the non-ferrous mining group, while earnings are projected to rise at a modest 6.0% annual rate from $4.89 in 2011 to $5.49 in 2013.
Buckeye Partners LP (BPL): BPL is an MLP engaged in wholesale distribution and transportation of refined petroleum products via a 5,400-mile pipeline system. On Friday, Director Mark McKinley filed SEC Form 4 indicating that he purchased 2,000 shares for $0.12 million, increasing his holdings in the company to 13,000 shares. This is on top of the purchase of 2,658 shares for $0.16 million by two insiders that we reported on Friday. In comparison, insiders purchased only an additional 4,000 shares in the past year. BPL trades at 16-17 forward P/E and 2.3 P/B compared to averages of 18.5 and 2.6 for its peers in the oil & gas pipelines group.
Aceto Corp. (ACET): ACET is engaged in the distribution of active ingredients for pharmaceuticals and biopharmaceuticals, specialty chemicals and agrochemicals. On Friday, SVP David Rosen filed SEC Form 4 indicating that he purchased 5,000 shares for $41,885. This is on top of a 5,000 share purchase reported on Thursday by COO Salvatore Guccione. In comparison, insiders purchased only an additional 63,000 shares in the past year, all in late-November of last year. ACET trades at a current 14.5 P/E and 1.4 P/B compared to averages of 13.4 and 1.8 for its peers in the diversified chemicals group.
National Oilwell Varco (NOV): NOV is engaged in the manufacture and sale of equipment, components and products used in oil and gas drilling and production, it provides oilfield services and supplies, and it distributes products and provides supply chain integration services to the upstream oil & gas industry worldwide. On Friday, two insiders filed SEC Forms 4 indicating that they exercised options and sold the resulting 151,295 shares for $12.7 million, with the majority of the sales (140,000 shares) by CEO Merrill Miller. This is on top of the sale of 30,667 shares that we reported just two weeks ago, so that overall insiders have reported selling almost 0.20 million shares so far this month. In comparison, insiders sold a total of 0.38 million shares in the past year.
NOV reported its Q4 just two weeks ago, beating analyst revenue ($4.26 billion v/s $4.03 billion) and earnings ($1.37 v/s $1.30) estimates, and was subsequently upgraded by Morgan Stanley and Global Hunter; currently, the stock trades at 12 forward P/E and 1.8 P/B compared to averages of 12.9 and 2.3 for its peers in the oil field machinery and equipment group.
Celanese Corp. (CE): Celanese is a global, integrated producer of specialty and intermediate chemical products. It is the world's largest producer of acetyl products, and a leading global producer of high-performance engineered polymers used in consumer and industrial products. On Friday, three insiders filed SEC Forms 4 indicating that they sold a total of 99,000 shares for $5.1 million. The majority of the shares were sold by CFO Steven Sterin (75,000 shares) and SVP Jacquelyn Wolf (15,000 shares), with both acquiring the shares as a result of exercising options. In comparison, insiders sold a total of 0.35 million shares in the past year.
Celanese reported its Q4 at the end of last month, on January 31st, beating earnings (58c v/s 56c) and revenues ($1.61 billion v/s $1.56 billion); its shares are up modestly after the report, and currently trade at 9-10 forward P/E and 6.0 P/B compared to averages of 10.8 and 2.6 for its peers in the diversified chemicals group.
On top of these, some additional large insider sales on Friday in the basic materials and energy sectors included:
- a $62.5 million sale by Director Andrew Gould at Schlumberger Ltd. (SLB), a provider of technology services, project management and information solutions to the petroleum industry worldwide.
- a $3.2 million sale by Director Robert Murphy at Murphy Oil Corp. (MUR), engaged in the exploration, production, refining and marketing of oil and gas in the U.S. and U.K.;
- a $2.6 million sale by EVP William Schumann at FMC Technologies Inc. (FTI), a designer, manufacturer and providers of service systems and products for land and offshore exploration and production of oil and gas;
- a $1.4 million sale by two insiders at Solutia Inc. (SOA), a manufacturer of high-performance chemicals, poly-vinyl butyral and other engineering products sold worldwide; and
- a $1.1 million sale by Director William Gardiner at SM Energy Co. (SM), engaged in the exploration, production and acquisition of crude oil and natural gas in North America.
Credit: Fundamental data in this article were based on SEC filings, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.