An Insider Bought Piedmont Natural Gas

Page 1 of 2

According to a filing with the SEC, the spouse of Piedmont Natural Gas Company, Inc. (NYSE:PNY) Board member Phillip Wright purchased 13,000 shares of the company’s stock on December 27th at an average price of $30.69 per share. We track insider trading activity- including when family members of an insider are buying- because even in these cases buying the stock reduces diversification, which is generally not rational unless there is a good deal of confidence in the company. This is one explanation for why insider purchases tend to be bullish signals (learn more about studies on insider trading). Our database of insider trading filings shows that Wright had previously purchased shares of Aegion Corp (NASDAQ:AEGN), where he also serves on the Board of Directors, at about $16 per share this past June; that stock currently trades at above $21. Research Wright’s insider activity.

Piedmont Natural Gas Company, Inc. (NYSE:PNY)

Piedmont Natural Gas Company, Inc. is a natural gas utility serving customers in the Carolinas and Tennessee. Its fiscal year ended in October, and the company recently filed its 10-K; revenue was down 22%, due to lower natural gas prices. However, because the utility buys that natural gas in turn, its cost was down a similar amount and so gross margins were flat for the year compared to the last fiscal year. Lower utility interest charges led to moderately higher net income and earnings per share. Piedmont reported $1.66 in EPS, for a trailing P/E multiple of 19 given the current market capitalization of $2.2 billion. That is rather high for most value investors, considering that the company doesn’t have many growth prospects; higher natural gas prices push up revenue and costs alike.

Instead, as with many other utilities, a case for investing rests on the stock’s weak correlation with the broader market- the beta is 0.5- and a dividend yield close to 4%. These traits are appealing to income investors, as well as to defensive-minded investors who want to limit their risk (or who believe that the rest of their portfolio already has plenty of risk). The quarterly dividend payment has increased by a penny each year since 2006, so we feel fairly comfortable that Piedmont Natural Gas Company, Inc. will continue to return cash to shareholders in this fashion. If it increases by 1 cent per share again in 2013, then the forward dividend yield would come in at 4.0%.

Page 1 of 2
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 9 Most Dangerous Countries for Tourists to Visit

Reign of Terror: The 10 Most Ruthless Politicians in History

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

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!