Insiders made noteworthy buys in four basic materials and energy stocks this past week (May 29 to June 1), and sold three others. These were selected based on a review of over 1,200 separate SEC Form 4 (insider trading) filings last week, 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 pickup based on historical buying and selling in the stock.
Westlake Chemical (WLK): WLK is a manufacturer of basic chemicals, polymers and fabricated plastic products for consumer and industrial markets worldwide. Last week, on Tuesday and Thursday, three insiders filed SEC Forms 4 indicating that they sold 134,651 shares for $7.6 million, with a portion of the shares sold resulting from the exercised of options. In comparison, insiders sold 0.17 million shares in the past year.
In its latest Q1 (March), WLK beat analyst revenues and earnings estimates ($1.31 vs. $1.26). Its shares currently trade at 12.8 current P/E on a TTM (trailing 12-month) basis and 1.9 P/B compared to averages of 13.4 and 7.3 for its peers in the plastics group, while earnings are projected to rise strongly from $3.87 in 2011 to $5.56 in 2013 at an annual growth rate of 19.9%. The stock was recently upgraded by UBS and of the seven analysts who cover it, four rate it at hold, one at buy and the remaining two at underperform, with a mean target price of $59, above the current price in the $50 range.
In addition to WLK, insiders also reported noteworthy sales last week in the basic materials and energy sectors in:
- Cheniere Energy (LNG), an operator of LNG receiving terminals and natural gas pipelines in the Gulf Coast of the U.S., in which Chairman and CEO Charif Souki filed SEC Form 4 indicating that he sold 100,000 shares for $1.5 million, in comparison to 0.66 million shares sold by insiders in the past six months.
- Carrizo Oil & Gas (CRZO), that is engaged in the exploration, development and production of oil and natural gas in the U.S. and the U.K. On Thursday, in which six insiders filed SEC Forms 4 indicating that they sold 49,556 shares for $1.2 million, in comparison to 104,382 shares sold in the past year. Insiders acquired 133,732 shares via the vesting of equity awards, and the 49,556 shares sold were to satisfy the reporting person's federal tax obligations.
On top of these, insiders also reported noteworthy buys this past week in the basic materials and energy sectors in:
- Hercules Offshore (HERO), that provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry worldwide, in which Director Thomas Bates filed SEC Form 4 indicating that he purchased 40,000 shares for $0.14 million, in comparison to insiders purchasing 0.16 million shares in the past two years;
- Aluminum manufacturing companies Noranda Aluminum Holding (NOR), a manufacturer of value-added primarily aluminum products and high quality rolled aluminum coils, in which Director Alan Schumacher filed SEC Form 4 indicating that he purchased 5,000 shares for $38,350, the only insider purchase in the past year;
- Titanium Metals (TIE), that is a manufacturer of titanium sponge, and melted and mill products for the aerospace, chemical, power and pollution control industries, in which Director Glenn Simmons filed SEC Form 4 indicating that he purchased 3,000 shares for $35,730, the only insider purchase in the last six months; and
- Arch Coal (ACI), that is engaged in the production of steam and metallurgical coal from surface and underground mines, in which Director Peter Wold filed SEC Form 4 indicating that he purchased 5,000 shares for $32,300, in comparison to 50,740 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.
Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our 'opinions' and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.