Insider Buying Shines Spotlight on 3 Stocks That Look Cheap

Earthstone Energy Inc. (NYSEMKT:ESTE) is another struggling company that saw an insider purchase shares last week. Director Jay F. Joliat reported purchasing a new stake of 10,000 shares last Thursday at prices that ranged from $11.55 per share to $12.42 per share, which is held indirectly through Beefcarver Inc. The shares of the independent oil and gas exploration and production company have lost 43% since the end of January 2015. On December 16, Earthstone Energy and Lynden Energy sealed a merger agreement, under which Earthstone is set to purchase all of the outstanding shares of Lynden. Lynden shareholders will receive 0.02842 of a share of Earthstone common stock in exchange for each share of Lynden owned, while the acquirer will issue roughly 3.7 million shares of common stock to finance the deal.

Earthstone Energy’s oil revenue for the nine months that ended September 30 grew by $6.3 million or 25% year-over-year to $32.59 million, due to increased volume, which was in turn offset by a decrease in realized prices. It is important to note that the company’s lease operating expenses (which include all costs associated with the operation of wells and related facilities for operated and non-operated properties) on a unit-of-production basis decreased to $9.18 per BOE for the first nine months of 2015, from $10.95 during the same period of 2014. The decrease was mainly attributable to a decline in the cost of oil field services and to economies of scale on its operated Eagle Ford property. Therefore, it appears that the company is well-positioned to endure the low crude oil price environment and thrive when the crude oil supply glut starts to fade away, considering its strong balance sheet, low production costs, and expansion efforts. Jim Simons’ Renaissance Technologies sold out its 15,563-share stake in Earthstone Energy Inc. (NYSEMKT:ESTE) during the third quarter.