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
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

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

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

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!