We present here four noteworthy buys and three noteworthy sells from Monday's SEC Form 4 (insider trading) filings in the basic materials and energy sectors, as part of our daily and weekly coverage of insider trades. These were selected by a review of over 375 separate transactions in over 230 different companies filed by insiders on Monday. 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.
Arch Coal Inc. (ACI) is engaged in the production of steam and metallurgical coal from surface and underground mines. On Monday, Chairman & CEO Steven Leer filed SEC Form 4 indicating that he exercised options and sold the resulting 218,900 shares for $3.0 million, pursuant to a 10b5-1 plan, ending with 22,420 shares in direct and another 63,797 shares in indirect holdings after the sale (not including derivative securities). In comparison, insiders sold 0.12 million shares in the past year.
ACI just yesterday announced that Leer would retire on April 26th, being replaced by current COO John Eaves. The company earlier this month, on February 10th, reported a disappointing Q4, missing earnings and revenue estimates, and more importantly projecting softening market demand, especially in the thermal coal market as utilities increasingly shift to natural gas due to cost advantages.
Its shares have dropped off 10% since the Q4 report, and currently trade 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 14.0% compound growth rate from $1.07 in 2011 to $1.39 in 2013. Analyst estimates for FY 2013, however, have dropped off a cliff from $3.02 just 60 days ago to $1.39 now, and the stock 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.
Amyris Inc. (AMRS) sells ethanol produced by third parties under short-term agreements through a network of storage terminals. On Monday, Total Gas & Power USA, a corporate insider by virtue of its 10% ownership of AMRS, filed SEC Form 4 indicating that it purchased 2.29 million shares for $13.2 million, increasing its holdings in the company to 11.94 million shares after the purchase. Total Gas & Power USA is a part of Paris, France-based international integrated oil & gas company Total Fina SA (TOT), that is engaged in worldwide oil & gas production, other upstream, and refining, marketing and transportation activities, and in specialty chemicals. AMRS and TOT recently announced an agreement in November of last year to expand their current R&D partnership, and to form a joint venture to bring the next generation renewable fuels to market at a commercial scale.
Cliffs Natural Resources (CLF) is a mining and natural resources company, producing iron ore pellets, lumps and fines iron ore, and metallurgical coal products. It operates six iron ore mines in MI, MN, and eastern Canada; two iron ore mining complexes in western Australia; five metallurgical coal mines located in WV and AL; and one thermal coal mine in WV. On Monday, EVP Donald Gallagher filed SEC Form 4 indicating that he sold 20,000 shares for $1.4 million, ending with 38,530 shares in direct and another 99,777 shares in indirect holdings in the company. In comparison, insiders at CLF sold 0.12 million shares in the past year. CLF reported its Q4 two weeks ago, on February 15th, missing analyst earnings estimates ($1.30 v/s $1.61) and beating revenues ($1.66 billion v/s $1.62 billion); its shares currently trade at 5-6 forward P/E and 1.6 P/B compared to averages of 7.0 and 34.4 for its peers in the iron mining group.
National Oilwell Varco (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 and gas industry worldwide. On Friday, CFO Clay Williams filed SEC Form 4 indicating that he exercised options and sold the resulting 64,000 shares for $5.5 million, ending with 0.17 million shares after the sale (not including derivative holdings). This is in addition to the sale of 68,257 shares by three insiders for $4.6 million that we reported just this past week, so that overall insiders have reported selling a total of 0.43 million shares just in the past six trading days. In comparison, insiders sold 0.62 million shares in the past year.
NOV shares are up almost 25% so far this year. The company reported a good Q4 earlier this month, beating analyst revenue and earnings estimates. Its shares currently trade at 12-13 forward P/E and 1.8 P/B compared with averages of 12.9 and 2.3 for its peers in the oil field machinery and equipment group.
Spectra Energy Corp. (SE) is engaged in the gathering, processing, transmission, storage and distribution of natural gas in the U.S. and Canada. On Monday, two insiders filed SEC Forms 4 indicating that they sold a total of 39,252 shares for $1.2 million, with the large majority sold by Director Paul Anderson (32,000) and the remaining 7,252 shares sold by VP & Controller Allen Capps. SE trades at a discount 15-16 forward P/E and 2.3 P/B compared to averages of 18.2 and 2.2 for its (large-cap) peers in the oil & gas transportation & pipeline group, and it has a dividend yield of 3.5% compared to the 5.6% average for the group.
Furthermore, insiders also reported noteworthy buys on Monday in:
- Walter Energy Inc. (WLT), a producer of hard coking coal from underground mines for by the steel industry, in which SVP Earl Doppelt purchased 15,000 shares for $1.0 million;
- Penn Virginia Corp. (PVA), an independent oil & gas exploration & production company operating in Texas, Appalachia, the Mid-Continent and Mississippi, in which four insiders purchased a total of 11,100 shares for $54,238; and
- Rexx Energy Corp. (REXX), an independent oil & gas company operating in the Illinois Basin, the Appalachian Basin and the southwestern region of the U.S., in which two insiders purchased a total of 3,000 shares for $33,750.
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.