What Insider Buys Mean at Clean Energy Fuels

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Clean Energy Fuels Corp (NASDAQ:CLNE) co-founder, board member, and legendary oil man T. Boone Pickens made news in June when he bought Chesapeake Energy Corporation (NYSE:CHK)’s remaining Clean Energy Fuels Corp (NASDAQ:CLNE) shares. As of this writing, Pickens owns 22 million shares, just under 25% of the company.

According to an SEC form 4 filed on Sept 12, CEO Andrew Littlefair bought 127,000 shares recently, paying more than $1.5 million. Why is this important for investors? Let’s take a closer look.

Clean Energy Fuels Corp (NASDAQ:CLNE)Sellers turned buyers?
Both Littlefair and Chairman Warren Mitchell routinely sell shares. Mitchell has sold some 80,000 shares over the past two years, while Littlefair has sold a whopping 524,000. However, like all things, without proper context it’s easy to miss what’s really going on.

Mitchell’s stock sales are all sales of grant options that are part of his compensation as Chairman. As to Littlefair, the 524,000 he’s sold over the past two years don’t look so bad when we add up the 400,000 in options he’s received, plus the 127,000 that he just bought. As of this writing, Littlefair still owns more than 477,000 shares.

The old saw about “many reasons to sell, only one to buy” comes to mind…

What’s it mean?
While there’s not any evidence to support this, the timing could very well indicate that the adoption of natural gas engines by shippers for their trucks is happening quickly. As of the last earnings call, the 400hp Cummins Inc. (NYSE:CMI) Westport Innovations Inc. (USA) (NASDAQ:WPRT) ISX12 G was just starting to roll off the factory lines. Activity at the Cummins Westport manufacturing lines could really be ramping up.

And while Cummins Inc. (NYSE:CMI), due to both its diversified nature in the heavy engine business and exposure to diesel and natural gas, is well set up for long-term growth, there’s little doubt that both Westport Innovations Inc. (USA) (NASDAQ:WPRT) and Clean Energy Fuels Corp (NASDAQ:CLNE) need to see fast uptake of the 400hp engine, and soon.

What doesn’t it mean?
It doesn’t mean that there’s a big new deal in the works, like a long-term fueling contract with Procter & Gamble, or another major metro transit authority. Rest assured that Littlefair wouldn’t be buying shares based on insider info like that.

It also doesn’t mean that anything has happened. Littlefair has routinely owned between 300,000 and 500,000 shares over the past several years. So it’s not out of the realm of possibility that he just wants to have a larger stake in the business, and not reflective of anything specific happening right now.

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