On Friday, Jan. 17th, Brent Smolik, President, Chief Executive Officer and Chairman at EP Energy Corp (NYSE:EPE) filed a Form 4 report with the U.S. Securities and Exchange Commission, declaring a purchase of the company’s stock. The insider acquired his first 100 shares for $19.9 per common unit at the company’s initial public offering (IPO). In addition, he indirectly owns 375,320 shares through EPE Management Investors, LLC.
EP Energy Corp (NYSE:EPE) is an independent exploration and production company focused on unconventional onshore oil and natural gas exploitation in the United States. Although it is already a relatively big company, with a market capitalization of approximately $4.5 billion, it just recently went public – on Jan. 17th. The management expects to raise $1 billion through this IPO, that will be used to repay debt and to pursue other corporate actions. However, this calculation was based on the assumption that the stock would trade at a price range midpoint of $25 last Friday, which wasn’t the case –which means that new estimates need to be made.
Previous to EP Energy Corp (NYSE:EPE)’s IPO, there were four major stockholders. The largest of them all was Apollo Funds, which held 54% of the stock. Trailing this fund were Riverstone, Access and KNOC, with 15% of the stock each. However, none of the major hedge funds that we track has yet disclosed a long position in the stock.
Still, the company looks like an interesting investment option: it is quite focused on its bottom line and making money for shareholders -keeping its net income high in relation to its revenue. In addition, its margins and returns comfortably surpass its peers´ mean. Finally, EP Energy Corp (NYSE:EPE) holds thousands of potential drilling locations and valuable assets, as well as an effective and efficient management team.
Moreover, as the stock price continues to drop –it fell almost 10% during Monday Jan. 20th – its valuation becomes increasingly attractive, especially in relation to its book values. As insiders start betting on this company, should you too?
Disclosure: Javier Hasse holds no position in any stocks mentioned