Seeking Alpha
Long/short equity, insider ownership
Profile| Send Message| ()  

Insider buying is often a sign of potential positive developments within a company, particularly if the insiders who are buying have a good track record with respect to their own buying. This is, however, only a secondary indicator and should not be relied upon solely when making the decision on whether to purchase a security. Insider buying in and of itself will not make a stock move higher, but can provide a further clue if all the other pieces of the puzzle - e.g., earnings, sales, return on equity, profit margins, etc. - are in place.

I screened for companies where at least one insider made a buy filed on September 13. I chose the top five companies with insider buying in dollar terms. Here are the five stocks:

1. Stone Energy (SGY) is an independent oil and natural gas exploration and production company headquartered in Lafayette, Louisiana, with additional offices in New Orleans, Houston and Morgantown, West Virginia. The company's business strategy is to leverage cash flow generated from existing assets to maintain relatively stable Gulf of Mexico (GOM) shelf production, profitably grow gas reserves and production in price-advantaged basins such as Appalachia and the Gulf Coast Basin, and profitably grow oil reserves and production in material impact areas such as the deep water GOM and onshore oil.

(click to enlarge)

Insider buys

Donald Powell purchased 50,000 nonconvertible Senior Notes due in 2017 on September 11. Donald Powell currently holds 27,272 shares of the company. Donald Powell serves as a director of the company.

Financials

The company reported the second-quarter financial results on August 1 with the following highlights:

Revenue$220.2 million
Net income$30.5 million
Cash$223.8 million

News

Stone Energy provided an update of the impact of Hurricane Isaac on September 4. All major facilities have been safely visited and re-manned. Damage to Stone's facilities across the Gulf of Mexico (GOM) appears to be very minor with no significant issues or problems.

Prior to the storm, Stone Energy corporation's daily production rate was approximately 35,000 barrels of oil equivalent [boe] from the GOM and 8,500 boe from Appalachia. Stone began shutting in and de-manning platforms in response to Hurricane Isaac on August 26, and by August 28, virtually all of the GOM production was shut-in. Following the storm, Stone began returning its fields to production. As of September 3, GOM daily production was approximately 18,000 boe with the remaining production being brought back on line as third party facilities allow. The Amberjack and Pompano fields remain shut-in waiting on onshore processing facilities, but expect to resume production during the next few days.

Stone's current average daily rate of production, including the Marcellus shale production, is approximately 27,000 boe. The quarterly impact on production guidance is estimated to be approximately 2,000 - 4,000 boe per day, lowering the quarterly guidance to 38,000 - 40,000 boe per day assuming no further storm disruptions. Annual production now may be on the lower end of the current annual guidance of 41,000 - 43,000 boe per day range (245-260 Mmcfe per day).

My analysis

The stock has a $38 price target from the Point and Figure chart. There has been five insider buy transactions this year. There has not been any insider selling this year. The stock is trading at a forward P/E ratio of 9.89. The stock could be a good pick here with a $38 price target.

2. Layne Christensen (LAYN) is a global solutions provider to the world of essential natural resources - water, mineral and energy. The company offers innovative, sustainable products and services with an enduring commitment to safety, excellence, and integrity.

(click to enlarge)

Insider buys

Nelson Obus purchased 50,000 shares on September 12. Nelson Obus serves as a director of the company.

Financials

The company reported the second-quarter fiscal 2013 (ending July 31) financial results on September 6 with the following highlights:

Revenue$289.6 million
Net loss$24.0 million
Cash$36.3 million

My analysis

The stock has a $17 price target from the Point and Figure chart. Nelson Obus' insider buy was the first insider buy this year. There has not been any insider selling this year. The stock is trading at a forward P/E ratio of 10.53 and has a book value of 23.04 per share. I would recommend buying the stock below the book value.

3. Halcón Resources Corporation (HK) is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States.

(click to enlarge)

Insider buys

  • James Christmas purchased 100,000 shares on September 13 and currently holds 105,000 shares of the company. James Christmas serves as a director of the company.
  • Scott Zuehlke purchased 5,670 shares on August 10. Scott Zuehlke serves as Vice President - Investor Relations.
  • Tucker Bridwell purchased 20,000 shares on August 6. Mr. Bridwell serves as a director of the company.
  • Stephen Herod purchased 43,346 shares on August 3 and currently holds 68,346 shares of the company. Mr. Herod serves as President of the company.
  • Joseph Rinando purchased 10,000 shares on August 3 and currently holds 21,000 shares of the company. Mr. Rinando serves as Vice President and Chief Accounting Officer of the company.
  • David Elkouri purchased 30,000 shares on August 3 and currently holds 70,000 shares of the company. Mr. Elkouri serves as Executive Vice President - General Counsel of the company.

Financials

The company reported the second-quarter financial results on August 2 with the following highlights:

Revenue$23.3 million
Net loss$0.59 per share
Cash$219 million

Outlook

Halcón reaffirmed the following previously disclosed production guidance during the second-quarter earnings release:

Production (Boe/d)3Q12E4Q12EFY12E
Low11,00017,0009,000
High13,00020,00011,000

On a pro forma basis, average daily production for the second quarter of 2012 was approximately 14,900 Boe/d, which represents 10% growth compared to the first quarter of 2012.

My analysis

The stock has a $5.5 price target from the Point and Figure chart. There has been six insider buy transactions this year. There has not been any insider selling this year. The stock is trading at a forward P/E of 16.63 and has a book value of $4.72 per share. I would recommend waiting until the $5.5 price target is hit before buying the stock.

4. Healthcare Trust of America (HTA), a publicly traded real estate investment trust, is a fully integrated, leading owner of medical office buildings. HTA listed its shares on the New York Stock Exchange on June 6, 2012. HTA is a full-service real estate company focused on acquiring, owning and operating high-quality medical office buildings that are located on the campuses of nationally recognized healthcare systems in the major U.S. metropolitan areas. Since its formation in 2006, HTA has built a portfolio of properties that totals approximately $2.5 billion based on purchase price and comprises approximately 12.4 million square feet of gross leasable area located in 26 states.

(click to enlarge)

Insider buys

  • Warren Fix purchased 22,000 shares on September 12 and currently holds 66,229 shares of the company. Warren Fix serves as a director of the company.
  • Gary Wescombe purchased 30,000 shares on August 23 and currently holds 67,500 shares of the company. Mr. Wescombe has served as an independent director of the company since October 2006.

Financials

The company reported the second-quarter financial results on August 7 with the following highlights:

Revenue$76.3 million
Funds From Operations (FFO)$11.7 million
Cash$24 million

My analysis

There has been two insider buy transactions this year. There has not been any insider selling this year. The trust has a book value of $6.44 per share and a 5.83% dividend yield. I would recommend buying the trust at its book value of $6.44 per share.

5. Asure Software (ASUR), is headquartered in Austin, Texas. Asure Software's intuitive and innovative technologies enable companies of all sizes and complexities to operate more efficiently. Asure Software is an industry leader in providing cloud-based workplace management solutions. Over 11,000 clients deploy Asure's workplace management software products, hardware products, services and support to improve their workforce and workplace processes.

(click to enlarge)

Insider buys

Red Oak Partners, LLC purchased 19,000 shares on September 12 and currently holds 679,224 shares of the company. Asure has 5,237,498 shares outstanding which makes Red Oak Partners a 13% owner of Asure.

Financials

The company reported the second-quarter financial results on August 14 with the following highlights:

Revenue$4.2 million
Net loss$0.3 million
Cash$1.5 million

Outlook

The company provided the following guidance on August 14:

Q3/2012Q4/2012FY/2013
Revenue$6.9-$7.1 million$7.8-$8.1 million31 million
EBITDA$1.1-$1.3 million$1.9-$2.2 million9 million
Free Cash Flow 7 million

My analysis

The stock has met its bullish $7.38 price target from the Point and Figure chart. There has been three insider buy transactions this year. There has not been any insider selling this year. The stock is trading at a forward P/E ratio of 22.50. I have a neutral bias for the stock currently.

Source: Top 5 Insider Buys Filed On September 13