An Insider Bought Shares of Ultra Petroleum

Page 1 of 2

Ultra Petroleum Corp. (NYSE:UPL)’s Controller and vice president Garland Shaw bought 3,000 shares of the company’s stock on March 4th at an average price of $16.20, according to a filing with the SEC. Shaw now owns almost 13,000 shares of Ultra’s stock, so in percentage terms this is a significant increase. Insider purchases are generally considered to be bullish signals, since the insider already earns income from the company and so buying more stock leaves them more exposed to company-specific risks; unless they are particularly confident in the company, the principles of diversification would actually guide towards selling shares.

Revenue was down 24% in 2012 compared to 2011, and this was almost entirely due to lower natural gas revenue. Even after the decline Ultra earns over 80% of its revenue from sales of natural gas, where prices have been in decline due to high production. As a result, even after adding back a large impairment the company’s pretax income fell from about $710 million in 2011 to about $100 million last year. Cash flow from operations also plunged, though because the company slashed capital expenditures operations generated more cash than were used in investing activities- which had not happened in the previous four years.

Still, conditions are poor though we’d generally point to the natural gas market rather than any company-specific factors. Analyst expectations are for $1.18 in EPS for 2013, implying a current-year earnings multiple of 14. From that point they expect net income to increase further. However, the stock has a number of bears with 15% of the outstanding shares being held short.

MILLENNIUM MANAGEMENT

Hedge fund interest in Ultra is moderate. Billionaire Israel Englander’s Millennium Management reduced its holdings of the stock by 78% between October and December, to about 610,000 shares (see Englander’s stock picks). Marathon Asset Management included Ultra Petroleum among its top single-stock holdings at the end of the quarter (find Marathon’s favorite stocks), but it was the only filer in our database of 13F filings which had more than $25 million invested in the company. Hedge fund interest in small-cap stocks such as Ultra can be particularly worth considering, since these stocks often receive less attention from mutual funds and the media and as such can be a rich source of alpha: we have found that the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year.

How does Ultra compare to its peers?

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

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

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!