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)

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!