5 Energy Stocks Insiders Love

$1.3 billion market cap energy services company Key Energy Services, Inc. (NYSE:KEG) had several insider report purchases of the stock in November. Because much of Key’s business is tied to drilling as well, it also carries a beta of 2.1 and its trailing earnings numbers are fairly low in the context of its market cap. Analysts expect a recovery here but the current-year P/E of 17 still represents a sizable premium to Weatherford. MHR Fund Management, which is managed by former Carl Icahn employee Mark Rachesky, owned over 17 million shares of Key at the end of September (find Rachesky’s favorite stocks).

Apache Corporation (NYSE:APA) is one of the market leaders in natural gas, and the $33 billion market cap global energy company has struggled over the last year due to pricing: in the third quarter of 2012, net income fell 82% from its levels a year earlier. We have recorded a number of insider purchases at the company. Boykin Curry’s Eagle Capital Management and Ric Dillon’s Diamond Hill Capital were two funds which reported over $100 million of the stock in their portfolio in their most recent 13F filing. Apache carries trailing and 2013 P/E multiples of 13 and 9, respectively- again suggesting an expectation that business will be better this year.

Four Board members were buying shares of Basic Energy Services, Inc (NYSE:BAS); while the most recent round came at prices closer to $9, some insiders have bought at prices higher than the current $13 over the last year. See a history of insider purchases at Basic. The market capitalization is only about $520 million, but close to a million shares are traded per day. Basic is another services company, and 20% of the outstanding shares are held short as many market players consider it overvalued. While its price is low in terms of historical performance- whether we consider P/E or EV/EBITDA multiples- the sell-side expects the company to be unprofitable this year.

Disclosure: I own no shares in any stocks mentioned in this article.