Helix Energy Insider Sees Value In His Company

Helix Energy insider: Owen E. Kratz, President and CEO at Helix Energy Solutions Group Inc. (NYSE:HLX) purchased 50,000 shares of common stock late last week, at $23.05 each. However, this is a weighted average price, since the shares were purchased in multiple transactions at prices ranging from $22.95 to $23.12.

The $1,152,500 transaction brought Kratz’ holding in the firm to 5,206,597 shares, valued at approximately $123,917,008. The CEO also has indirect holdings of 1,000,000 shares, since he is the general partner of Joss Investments Limited Partnership, the entity that controls the shares.

Helix Energy stock is currently trading at 2.8 times its sales, far above the industry standard of 1.8, and thus entailing a 55.5% price premium relative to its peers’ average. The company has been delivering poor results recently, with a grim forward outlook due to declining EBITDA and negative return on capital.

Nevertheless, the announcement of third quarter results gave shareholders a reason to regain confidence. Mr. Kratz stated, “third quarter results increased due to top line growth and profitability in both the Well Intervention and Robotics businesses.” He went on to explain, “Last month’s announcement of the Q7000 newbuild is indicative of our confidence in the growing market demand for well intervention services.”

The latest insider purchase is Kratz’s first transaction since 2011. Many expect the firm to regain its foothold following improved third quarter results, and displayed of confidence shown by the CEO’s million dollar sign of good will. Either way stock price experienced a boost in value since Kratz’s purchase, increasing by 3.7% from Thursday’s initial transaction at $22.95 per share to Friday’s current value of $23.80 per share. This increment in shareholder’s value represents a huge reversal of the downwards trend the stock has been experiencing over the past month, and is bound to inspire trust in investors.

Disclosure: Pablo Erbar holds no position in any stocks mentioned

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