Holly Energy Partners, L.P. (NYSE:HEP), a $2 billion market cap oil midstream company engaged in the business of operating a system of petroleum product and crude oil pipelines, storage tanks, distribution terminals and loading rack facilities, saw two of its insiders acquire its stock over the past couple of weeks.
Most recently, on June 20, Michael Jennings, Chief Executive Officer*, purchased 1,000 of Holly Energy Partners, L.P. (NYSE:HEP)’s Common Units $33.546 per share. After having spent $33,546 on the insider owns 7,000 shares of the energy company.
The previous week, on June 13, Doug Aron, Executive Vice President and Chief Financial Officer, bought 3,000 Common Units for prices ranging from $32.55 to $32.58 per unit. Following this $97,740.00 purchase, Mr. Aron holds 5,000 shares indirectly, and another 840, indirectly.
However, it seems like it is only these two insiders that feel bullish about Holly Energy Partners, L.P. (NYSE:HEP). Earlier this month, two Board Directors (William Stengel and Charles M. Darling IV) disposed of more than $114,000 in stock, or 3,208 shares.
Moreover, hedge funds seem to be following the same track as these Directors. One of the company’s largest hedge fund shareholders, Jim Simons’ Renaissance Technologies last declared having reduced its stake in the company by 28%, to 102,154 shares. And, Ken Griffin’s Citadel Investment Group recently sold out all of its Holly Energy Partners, L.P. (NYSE:HEP) shares -4,595 Common Units, 1,200 call options, and 2,600 put options.
So, you might wonder: should I feel bearish or bullish on this stock? Well, both positions have a valid foundation. On the one hand, Holly Energy Partners, L.P. (NYSE:HEP) boasts industry leading margins and returns (see graph below), while trading below industry average valuations in relation to its earnings. On the other hand, valuation in relation to its sales and book-values looks pretty unattractive, and debt levels, concerning. Moreover, long-term growth projections look just fine, but not great: analysts expect the company to deliver an average annual EPS growth rates around 12%-13% over the next five years, versus an industry average of 17%-18%.
* “Mr. Jennings is the Chief Executive Officer and a director of Holly Logistic Services, L.L.C. Holly Logistic Services, L.L.C. is the general partner of HEP Logistics Holdings, L.P., the general partner of the Issuer” (Sec.gov).
Disclosure: Javier Hasse holds no position in any stocks mentioned