We present here four noteworthy insider buys and one noteworthy insider sell in the basic materials and energy sectors from Wednesday through Friday's (May 2nd, 3rd, and 4th, 2012) over 1,100 separate SEC Form 4 (insider trading) filings, as part of our daily and weekly coverage of insider trades. 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):
Nabors Industries Ltd. (NYSE:NBR): NBR is a provider of oil, gas, geothermal and land drilling, land well and work-over services worldwide. On Thursday, Director James Crane filed SEC Form 4 indicating that he purchased 58,000 shares for $1.0 million, increasing his holdings to 82,000 shares. This is the only insider purchase at NBR at least in the last two years.
NBR reported its Q1 (March) quarter the week before last, on Tuesday, beating revenue and soaring well past analyst estimates (65c v/s 50c), with revenue and earnings growing 31% and 97% year-over-year respectively. After an initial gap-up the morning after the earnings report, the share has since moved lower to six-month lows, currently trading at a discount 6 forward P/E and 0.8 P/B compared to averages of 11.9 and 1.4 for its peers in the oil & gas drilling group. The rationale among bears is that lower natural gas prices will lead to lower exploration activity, that will negatively impact the need for NBR's services. However, with the company continuing to beat expectations, as it has now for the fourth straight quarter, the discount P/E combined with the attractive growth makes the stock an attractive buy at current levels.
Southern Co. (NYSE:SO): SO is a holding company engaged in generation, transmission and distribution of electricity serving customers in the southeastern U.S. in AL, GA, FL, MS and NC. On Wednesday, President & CEO of its utility company, Alabama Power Company, Charles McCrary filed SEC Form 4 indicating that he exercised options and sold the resulting 164,101 shares for $7.6 million. In comparison, insiders sold 1.32 million shares in the past year.
SO reported its Q1 (March) quarter just the week before last, on Wednesday, missing on both analyst revenue and earnings estimates (42c v/s 47c), with the company citing that earnings were negatively affected by warmer-than-normal weather during the first quarter of 2012. The stock currently trades at a slight discount at 16-17 forward P/E and 2.2 P/B compared to averages of 18.5 and 1.4 for the electric utilities group, and it has a dividend yield of 4.3% compared to the 3.5% average for the group.
Weatherford Intl Ltd (NYSE:WFT): Geneva, Switzerland-based WFT is a leading provider of equipment and services used in the drilling, evaluation, completion, production and intervention of oil and natural gas wells to independent oil and natural gas producing companies worldwide. On Thursday, SVP Dharmesh Mehta filed SEC Form 4 indicating that he purchased 10,000 shares for $139,000, increasing his holdings to 220,662 shares in direct and 4,361 shares in indirect holdings. This is the only insider purchase on record in the past year.
WFT reported its Q1 (March) quarter last week, on Tuesday, missing analyst revenue and earnings estimates (25c v/s 29c), and guiding Q2 EPS below consensus (24c-26c v/s 27c). However, analysts expect strong profit growth in the second half of 2012, with profits rising to 30-40c per quarter, and even stronger growth in 2012 to $1.68 in annual earnings. Its shares trade at 8-9 forward P/E and 1.1 P/B compared to averages of 11.7 and 2.4 for its peers in the oil field machinery and equipment group.
Furthermore, insiders also reported noteworthy buys on Wednesday through Friday of last week in the basic materials and energy sectors in:
- Penford Corp. (NASDAQ:PENX), a provider of specialty natural-based ingredient systems for food and industrial ingredient applications, in which Director Edward Ryan purchased 20,000 shares for $172,238, increasing his holdings to 33,539 shares in direct and indirect holdings, and in comparison to 35,700 shares purchased by insiders in the past two years; and
- Cliffs Natural Resources (NYSE:CLF), that is a mining and natural resources company that produces iron ore pellets, lumps and fines iron ore, and metallurgical coal products, in which EVP Kelly Tompkins purchased 3,000 shares for $186,207, increasing his holdings to 22,006 shares in direct and indirect holdings, and in comparison to 9,780 shares purchased by insiders in the past two years.
Credit: Fundamental data in this article and company descriptions are based on SEC filings, Zacks Investment Research, Yahoo, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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