Two Oil-Related Services Stocks With Multiple Insider Purchases

Tracking insider purchases is very important to our investment strategy, just as keeping an eye on hedge fund moves. This is why, in this article, I will look into two companies in the Oil-Related Services industry group, which have seen insiders buy their stock over the past couple of days.

The first company I would like to look into is Ferrellgas Partners, L.P. (NYSE:FGP), a $1.8 billion market cap distributor of propane, related equipment and supplies, which sells to customers, mainly in the United States. Over the past couple of weeks, at least two insiders at the company acquired its stock. The most active one has been Stephen Wambold,  the CEO and President of the company. Through nine separate purchases, Mr. Wambold added more than 4,000 shares of common stock to his holding, having paid prices ranging from $21.89 per share (on March 21st), to $22.61 per share (on March 28th). Over February, the company’s CEO had already increased his stakes in the company by 15,000 shares. After March transactions, the insider owns more than 84,000 shares of the company, valued at more than $1.94 million.

Ferrellgas Partners, L.P.

The other active insider was Tod Brown, Executive Vice President, who, on March 20th, procured 9,000 Ferrellgas Partners, L.P. (NYSE:FGP) shares for $11.63 each, using 9,000 stock options (right to buy) that he held. Mr. Brown now owns 45,000 shares of common stock.

This company boasts above average operating and net margins. However, its returns are not looking good, and neither is its stock valuation, at 35 times the company’s earnings (about three times its industry’s average). Nonetheless, the purchases that the insiders made make sense, since the company “continues to expand its operations through strategic acquisitions. The partnership announced its third acquisition in fiscal year 2014, taking the tally to approximately 245 to date” (Zacks).

Notwithstanding, hedge funds do not seem to agree with this view (or see no real potential in the company). Several prominent investors including Jim Simons and Matthew Hulsizer closed out their positions in the stock during the fourth quarter of 2013.

The other company on my list is Nuverra Environmental Solutions, Inc (NYSE:NES), a firm that provides environmental solutions to customers focused on the development and ongoing production of oil and natural gas from shale formations. Just like in the previous case, the company saw two insiders purchase its stock over the past couple of weeks.

Mark Johnsrud, Chief Executive Officer and Vice Chairman, acquired almost 28,500 shares of Common Stock on March 25th, and an extra 10,000 shares on March 27th. He paid prices ranging from $18.29 per share to $19.56 per share, and now owns more than 9.66 million shares, which are worth almost $195 million.

In addition, Curtis Jay Parkinson, Executive Vice President and Chief Financial Officer, bought, on March 20th, 2,500 shares of Nuverra Environmental Solutions Inc (NYSE:NES) for $17.87 each, and now holds 105,000 shares directly, plus 366.709 shares, indirectly, through his 401(k) Match Plan.

Despite negative margins and returns, it’s not only insiders that like this Nuverra: analysts seem to believe in this company too. In fact, they expect it to widely outperform its peers over the next five years, delivering average annual EPS growth rates of 25% (which double its industry’s mean).

On the other hand, hedge funds have substantially cut their exposure to this stock. For instance, Nelson Obus’ Wynnefield Capital, D. E. Shaw and Israel Englander (the three hedge fund with largest stakes) considerably shrank their stakes in the company over the last reported quarter.

Disclosure: Javier Hasse holds no position in any stocks mentioned

Recommended Reading:

Insiders Buy Shares of Methode Electronics Inc. (MEI) & Kratos Defense & Security Solutions, Inc (KTOS)

Two Small-Cap U.S. Regional Bank Stocks That Insiders Love

Digging Into Two Energy Stocks That Insiders Seem to Love

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

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

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!