3 Oil & Gas Stocks That Insiders Love

Tracking insider purchases is very important to our investment strategy. This is why, in this article, I will look into three companies in the Oil & Gas industry group, which have seen insiders buy their stock over the past couple of days.

The first company I would like to refer to is Stone Energy Corporation (NYSE:SGY), a $1.7 billion market cap independent oil and natural gas company engaged in the acquisition, exploration, exploitation, development and operation of oil and gas properties. On March 11th, Phyllis Taylor, a Board Director, purchased 7,000 shares of the company for $34.51 per share. He now owns 37,195 shares of the company, worth almost $1.3 million.

Stone Energy Corporation (NYSE:SGY)

This company boasts above average margins and returns. Its return on equity of 12.8% is, in fact, amongst the highest in its industry. This, added to a cheap valuation, at 14 times the company’s earnings, versus an industry mean of 33.4 x P/E, makes Mr. Phyllis’ purchase understandable. Moreover, a consensus median price target of $42 per share provides plenty of upside potential for the stock.

Hedge funds seem to notice this potential too. Several prominent investors including Ken Griffin, Israel Englander and Chuck Royce hold million dollar stakes in the stock. However, poor long term growth projections and high debt levels make us feel slightly unsure about this investment option.

Second on my list is MPLX LP(NYSE:MPLX), a $3.6 billion market cap limited partnership recently formed by Marathon Petroleum Corporation (NYSE:MPC) that owns, operates, develops and acquires crude oil, refined product and other hydrocarbon-based product pipelines and other midstream assets. Also on March 11th, an insider acquired stock from the company: Richard C. Wilson, a Board Director, purchased 3,000 shares of the company at an average price of $49.42 per share. Following the reported transaction, the insider held 8,565 shares of the company valued at more than $400,000.

Once again, wide margins and decent returns, coupled with a cheap valuation (12.9 x P/E, compared to the 37.9 x industry average), make this stock an attractive investment option and Mr. Wilson’s purchase a comprehensible one. Furthermore, long-term EPS growth projections that is double its peers’ mean and a 2.5% dividend yield make it a great option for patient investors. Jim Simons and Russell Lucas seem willing to wait; they hold stakes worth approximately $1 million, combined.

Another interesting case is that of Midcoast Energy Partners LP (NYSE:MEP), a natural gas services provider with a market cap slightly under $1 billion. On March 11th, Gregory C Harper, Principal Executive Officer, bought 2,350 Class A Common Units of the company for $20.30 each. Mr. Harper had initiated a stake in the company only four days earlier; on March 7th, through several acquisitions, he had procured 2,590 shares of Midcoast Energy Partners at prices ranging from $20.17 to $20.19 per share. The insider now owns 4,940 shares of the company.

In this case, Mr. Harper’s bet must seems to have been placed on growth potential and a 3.2% dividend yield, since the company’s margins and returns are razor-thin. Nonetheless, the stock looks like a suitable (and cheap) option for long-term investors. We should highlight, however, that none of the major hedge funds that we track hold long positions in this stock.

 

Disclosure: Javier Hasse holds no position in any stocks mentioned

Recommended reading:

Elliott Management Backs Its Intention to Take Over Riverbed Technology, Inc. (RVBD); Boosts Stake in Juniper Networks, Inc. (JNPR)

Clinton Group Cuts Stake in The Wet Seal, Inc. (WTSL)

Deerfield Management Boosts Its Stake in OvaScience Inc (OVAS)

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Biggest Airports in the World

The 5 Most Gang Infested Cities In America

The 34 Smartest Countries in the World

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!